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Basel vs. Solvency

Thread starter #1
Hi.

Can someone please confirm if either Basel or Solvency account for diversification benefits? I have encountered varying answers to this question. The 2014 GARP Practice Exam had a question on diversification and the correct answer was that Basel II IMA for Market Risk accounts for diversification benefits. I know that Basel II and Basel III Credit and Operational Risk do not have diversification benefits, but does Solvency have it?

Thank you.
 
#4
As far as I recall (someone please correct me if I am wrong), Basel doesn't allow diversification benefits between risk types. I don't know about Solvency's treatment though.
 
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