问题如下：
Capital is used to protect the bank from which of the following risks?
选项：
A. Risks with an extreme financial impact
B. High-frequency, low-loss events
C. Low-frequency risks with significant
financial impact
D. High-frequency uncorrelated events
解释：
C is correct. Capital is supposed to absorb risks that have significant financial impact on the firm. Risks with extreme financial impact, such as systemic risk, cannot be absorbed by capital alone, so answer a. is wrong. Low-loss events are unimportant, so b. is wrong. Uncorrelated events tend to diversify, so d. is wrong.
请问为什么不是cover HFLS的loss呢？我理解capital是cover unexpected loss，而basel要求capital要cover VaR（不减EL），那它cover的这部分小于等于VaR的不就是非极端的损失吗？而超过VaR的极端损失（LFHS）不是用insurance之类的来cover吗？
