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Answer

Correct Option is 1, 2 and 3

Basel II is the second international banking regulatory accord that is based on three main pillars: minimal capital requirements, regulatory supervision and market discipline. Minimal capital requirements play the most important role in Basel II and obligate the banks to maintain minimum capital ratios of regulatory capital over risk-weighted assets. Because banking regulations significantly varied among countries before the introduction of the Basel accords, a unified framework of Basel I and, subsequently, Basel II helped countries alleviate anxiety over regulatory competitiveness and drastically different national capital requirements for the banks.

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