The capital conservation buffer:
A. Will provide an extra 2.5% Common Equity Tier 1 capital buffer in times of stress.
B.will be used exclusively to protect banks from the losses garnered from OTC derivatives trading.
C. Is required only for banks with inadequate liquidity coverage and net stable funding source ratios.
D. Is covered in the increased Common Equity Tier 1 capital to risk-weighted assets ratio that wi1l increase to 4.5% from the current 2% over the next few years.
Answer:A
The capital conservation buffer is intended to provide an extra cushion against loss in times of stress. It is 2.5% Common Equity Tier 1 capital to risk-wejghted assets, which in effect increasesthe total Common Equity Tier 1 capital ratio to 7%.