The Basel II Accord included which crucial requirement for banks?

The Basel II Accord introduced enhanced requirements for banks primarily focusing on risk management and regulatory capital, emphasizing the need for transparency regarding risk exposures. One of the key elements of the Accord was the mandate for public disclosure of risk indicators. This requirement aimed to improve market discipline by ensuring that stakeholders, including investors and depositors, have access to valuable information about a bank's risk profile and capital adequacy. By having a clearer picture of a bank's risks, market participants can make more informed decisions, which promotes stability in the financial system.

The option about complete transparency of management practices addresses good governance but is not a specific requirement of Basel II. The establishment of reserve balances relates more to liquidity requirements and does not directly reflect the risk measurement and management goals of Basel II. Lastly, increased fees for banking services does not pertain to the regulatory focus of the Accord, which centers on risk management and capital adequacy rather than cost structures of banking.