English: Cloze Test for Upcoming Exams – Set 108

Directions: In the passage given below there are 10 blanks. Every blank has five alternative words given in options (A),(B),(C), (D) and (E). You have to tell which word is APPROPRIATE according to the context. Mark that inappropriate word as your answer.

SOME banks find existing capital requirements too taxing. To no one’s surprise, on December 23rd Monte dei Paschi di Siena, at present Italy’s fourth-biggest bank, asked the Italian state for help, having failed to raise from the private sector €5bn ($5.2bn) in capital demanded by the European Central Bank before the year’s end. Three days later Monte dei Paschi said that the ECB had redone its sums—and concluded that the _____1____  lender faced an even bigger shortfall, of €8.8bn.

Plenty of other European banks—in far better nick than poor old Monte dei Paschi, which is overloaded with bad loans—are _____2_____ that they too may eventually have to find more capital. They have spent years _______3_______ cushions that the financial crisis showed to be worryingly thin, but fear that proposed adjustments to Basel 3, the latest global standards, will require more. The Basel Committee on Banking Supervision, which draws up the standards, had hoped to agree on the revisions by the end of 2016. It’s not there yet: on January 3rd an _______4_______ meeting of central-bank governors and supervisors, to approve the changes, was postponed.
The amendments are _______5_______ to reduce the variation in banks’ own calculations of risk-weighted assets (RWAs), largely by restricting their use of in-house models. Under Basel rules, the ratio of a bank’s equity to its RWAs are a key _______6_______ of its strength: if lenders are too ______7_____ about risk, their estimated RWAs will be too low and their reported capital ratios misleadingly high.

The main _______8_______ to an agreement is the committee’s proposal of an “output floor”—a lower bound for banks’ RWAs—calculated as a percentage of the figure churned out by a “standardised” method. The higher the percentage, the tighter the standard: a first version of the proposals suggested 60-90%; a failed compromise last month ________9________ gradually raising it to 75% over four years, starting in 2021.

American officials like the floor, believing that it limits banks’ ability to play games with the rules. European banks and officials don’t. Both the Association of German Banks and the Bundesbank, for example, want no floor at all. They ______10______ that internal models make capital calculations more, not less, sensitive to risk.

1. smitten, gratitude
   stricken, afflicted
   impaired, peace
   desolate, quicken
   All are correct
   Option B
   

    

2. irritable, irked
   moaning, quibbling
   complaining, grouching
   grumbling, muttering
   All are correct
   Option E
   

    

3. plumping up, shaking up
   agitate, churn
   concuss, soothe
   tranquilize, stir
   All are correct
   Option A
   

    

4. impending, chimerical
   immediate, unexpected
   detached, inevasible
   imminent, gathering
   All are correct
   Option D
   

    

5. affianced, reliance
   contemplated, conflicted
   intended, plighted
   betroth, pledged
   All are correct
   Option C
   

    

6. measure, estimate
   scope, estimate
   gauge, criterion
   basis, guess
   All are correct
   Option C
   

    

7. sanguine, assured
   buoyant, secure
   upbeat, spirited
   animated, positive
   All are correct
   Option E
   

    

8. assistance, bar
   advantage, help
   obstacle, crimp
   trench, palisade
   All are correct
   Option C
   

    

9. contemplated, contingent
   proposed, considered
   submitted, suggested
   scheduled, schemed
   All are correct
   Option E
   

    

10. argue, attest
    insist, challenge
    avow, consent
    aver, along
    All are correct
    Option A