Capital requirement

sector and emerging market countries (Walter, 2010). The banking sector has been effected by many factors which contributes to its vulnerability. Some of the factors that adds to the vulnerability of the bank are minimum availability of high-quality capital, lack of high quality liquid assets, and sources for reliable funding. After the great economic crisis of 2008 (Subprime crisis), many banks had failed leading to a great recession. Since the beginning of the financial turbulence which began in the

activities, accepting wholesale and foreign deposits, granting credit and acting as a fiduciary. A branch may not engage in retail deposit-taking activities. A branch is cheaper to establish than a separately chartered bank subsidiary because a separate capital investment is not required, and the legal and accounting costs of maintaining a separate corporation can be avoided. In addition, a branch may make larger loans

measured by the revenues they achieve to financial institutions and its stock value (Kashyap, Rajan et al. 2008). Banks went into trouble especially after the expansion of mortgage finance and facilitating loans to homebuyers with the lowest possible requirements in which homeowners faced difficulties in continuing their regular loan installments. Borrowers started to declare their bankruptcy in which their dwellings where owned by the lending banks and with the increase in homeowner’s

Focus on Capital requirement Positive： Improve the standard of capital ratio: According to Basel 3, Capital requirement includes 4 different ratios: Common equity Tier 1 capital ratio =(Common equity Tier 1 capital)/( risk-weighted assets) Tier 1 capital ratio =(Total Tier 1 capital)/( risk-weighted assets) Total capital ratio =( Tier 1 capital+ Tier 2 capital)/( risk-weighted assets) Capital conservation buffer Comparing to Basel 2 , the Basel 3 requirement of common equity Tier 1 capital ratio

created for banking system regulation, which represents upgraded capital requirements, liquidity norms, and additional monitoring tools for banking supervision and regulation. These standards were first established in 2009 by the BCBS though some of the Committee’s proposals remain currently open for discussion. The resultant

Basel II sets up rigorous risk and capital management requirements designed to ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through its lending and investment practices. Basel II uses a three pillars concept 1 Minimum capital requirements (addressing risk) 2 Supervisory review 3 Market discipline – in order to promote greater stability in the financial system

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, changes to the Liquidity Coverage Ratio ("LCR"), requirements related to intraday liquidity management and public disclosure requirements related to the LCR. 3 Regulation 38(16) was amended to incorporate South African Reserve Bank

APS 110 sets out detailed capital requirements which apply on a stand-alone as well as consolidated group basic except foreign ADIs. APRA appraises the ADI’s financial strength at three levels to ensure that the ADI is adequately capitalised. These are level 1 comprising ADI itself or the ELE, level 2-consolidated banking group and level 3-the conglomerate group4. Furthermore, consistent with Basel Capital Accord, the approach used by APRA for assessing an ADI’s capital adequacy focuses on three

Introduction The recent global financial crisis of 2007-2009 has brought people’s attention to the threat presented by a certain type of financial institutions which are imperative to the functioning of the financial system to the extent that the failure or insolvency of such institutions can destabilise the financial system, and subsequently impose serious negative effects on the real economy (Freixas, & Rochet, 2013; Ueda & Weder di Mauro, 2013; Bongini & Nieri, 2014; Elliott & Litan, 2011). These

Introduction Canadian Banks has never attracted that much of attention of the whole world until the subprime meltdown in 2007/2008. Canada was the only G7 country that did not have a government bank bailout. Canadian banks remained profitable through the crisis. A World Economic Forum report ranked Canada first among 134 countries on the soundness of its banks. This paper aims to analyze persuasive reasons for the remarkable success of Canadian Banks in the subprime meltdown. Regulations have been