Basel II

IMPERATIVES OF BASEL III ACCORD Dr.T.V.Rao, M.Com.,Ph.D., CAIIB,ACIBS(UK), Professor, B.V.Raju Insitute of Technology, Narasapur, Medak Dt., Telangana State ABSTRACT: The stability of the Financial System largely depends on the strength and resilience of the Banking System. Indian Banks which suffered from negative capital adequacy, negative earnings and high NPAs in the Seventies and eighties are now on a robust footing thanks to the reforms brought about by the Narasimham Committee I and II and on

our throughout research on Basel III regulation and it’s pros and cons, our group came to the conclusion that Basel III indeed made the banking system to become more stable and safe compared to the time where there is no Basel III regulation. Before we begin to defense our standpoint, we would like to have a short review of what exactly Basel III is. Basel III is a regulatory reform measures to improve the banking regulation, supervision and risk management. Basel III was published in 2009

The Basel Accords is a set of regulations adhered by banks. The main goal was to help banks maintain a minimum capital to sustain losses during a bad economy period. Also, to aid financial institutions reduce risk while they grow and operate. introduced in 2004, Basel II had an improved and stricter framework compared Basel I, yet during the financial crisis it failed. The failure of Basel II regulations caused Basel III to be created. Its purpose was to work along with Basel I and Basel III framework

In 1988, the Basel I was published by the BCBS. It is a new method to the measure the capital and also it focused on the credit risk and appropriate risk-weighting of assets (International convergence of capital measurement and capital standards, 1988). Under the concept of the risk-weighted asset, the regulators can include the riskiness of the bank’s activities into the calculations of the capital adequacy (Lange, Saunders & Millon Cornett, 2015). “The core requirement of the Basel I were 2 capital

S w 910N29 BASEL III: AN EVALUATION OF NEW BANKING REGULATIONS1 David Blaylock wrote this case under the supervision of David Conklin solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of

government gazette and will come into effect on 1 July 2016. A number of cosmetic changes have been made to the Regulations but a few material changes will be highlighted in this alert. 2 Subsequent to the implementation of Basel III in South Africa on 1 January 2013, the Basel Committee on Banking Supervision ("BCBS") issued revised requirements in respect of a wide range of matters which necessitated amendments to our regulations. The Regulations now cater for the changes to capital disclosure requirements

Solvency II is to be implemented on the 1st January 2016. It is a three pillar based system (based on Basel II) that follows on to try and fill the gaps from Solvency I. Solvency II is a far more risk based approach than its predecessor and is the greatest regulatory change that insurance firms in the EU have faced. Inevitably, Solvency II brings its own challenges and difficulties. Whether Solvency II will lead to positive or negative changes remains a point of contention between stakeholders, but

of 2007 – 2009, the Basel Committee of Banking Supervision launched a program that substantially revised the existing capital adequacy guidelines. As a result, the Committee released a new version of bank capital and liquidity standards, referred to as “Basel III”, in December 2010. Subsequent guidance was issued in January 2011 regarding minimum requirements for regulatory capital instruments. The G20 , including United States and the European Union, publicly endorsed the Basel III standards at their

FINA3304: 2015 Group Assignment Task 1: Basel III – Capital adequacy Basel III consists of a comprehensive set of reform measures intended to improve the regulation, supervision and risk management of the banking sector (APRA 2013). Being developed mainly in response to the credit crisis of 2007, it requires banks to maintain adequate leverage ratios and meet certain capital requirements. Basel III builds on the basis of previous Basel I and Basel II and is aimed at improving the banking sector’s

From Basel I to Basel III In this section, we will describe the Basel Committee’s approach to financial regulation. The approach is described trough an exposition and analysis of the three Basel frameworks. We are going to explain all three of them, as the preparation of new regulation is build on top of the existing ones. It will therefore also be interesting to see in which direction the Basel Committee has changed the regulation Basel I: As mentioned before G-10 counties established the Basel