Download or read book Impact of Basel III on Public and Private Sector Banks written by Charu Watts and published by . This book was released on 2023-06-06 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The implementation of Basel III regulations has had a significant impact on the banking industry worldwide. This description focuses on the effects of Basel III implementation in the banking industry, specifically through a comparative study of selected public and private sector banks. Basel III, developed by the Basel Committee on Banking Supervision, aims to strengthen the global banking system by introducing stricter capital adequacy, liquidity, and risk management requirements. The comparative study explores how these regulations have influenced both public and private sector banks. The effects of Basel III implementation on banks can be observed in various areas. Firstly, capital adequacy requirements have compelled banks to maintain higher capital reserves, ensuring they have a sufficient cushion to absorb potential losses. This has led to changes in banks' capital structures and strategies, affecting their lending capacity and profitability. Secondly, Basel III's liquidity regulations, such as the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), have emphasized the importance of maintaining sufficient liquidity buffers. Banks have had to adopt strategies to manage their liquidity positions effectively, ensuring they can withstand periods of financial stress. Additionally, Basel III's enhanced risk management requirements have prompted banks to improve their risk assessment frameworks and strengthen internal controls. Banks have focused on better risk measurement, monitoring, and mitigation practices, resulting in a more resilient banking system. The comparative study explores how the effects of Basel III implementation differ between public and private sector banks. Factors such as governance structures, capital resources, risk appetite, and market competitiveness may influence how banks in each sector adapt to the new regulations. Overall, the implementation of Basel III regulations has brought about significant changes in the banking industry. While it has increased the resilience and stability of banks, it has also posed challenges for profitability, lending practices, and liquidity management. The comparative study of selected public and private sector banks provides valuable insights into how different banking institutions have responded to and navigated these regulatory changes. By understanding these effects, policymakers and industry stakeholders can make informed decisions and further strengthen the global banking system.

Download or read book International Convergence of Capital Measurement and Capital Standards written by and published by Lulu.com. This book was released on 2004 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Analysing the Determinants of Total Risk in Basel III Transition Era written by Hashem Zarafat and published by . This book was released on 2018 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: Banking sector in India has implemented Basel norms since 1998. To comply with Basel norms, Banks in India had to undergo a series of reforms and changes such as technological advancements, balance sheet restructuring, credit quality enhancements and capital raising strategies. From Basel I to Basel III, requirement of maintaining Capital Adequacy Ratio has changed which brought significant changes in portfolio management of Banks in India. With the introduction of Basel III norms, Banks had to revisit and challenge their own old business strategies fundamentally for raising quality capital as prescribed by Basel III norms and maintain profitability at the same time. In this paper, we will focus on impact of Basel III norms on Indian Banks and determine dependent and independent factors of total risk in Basel III transition era. This study aims at investigating the internal and external factors affecting bank's total risk. We applied panel data regression and relevant econometric tests such as unit root test, multicollinearity test, panel data analysis and test of heteroscedasticity and serial correlation for 35 Indian public and private sector banks from 2011 to 2016. We concluded that among internal factors, capital and profitability are statistically significant, whereas size, deposits to total asset ratio, loans to total asset ratio, operating expenses to total asset ratio, interest expense to total asset ratio, and liquid asset to total asset ratio do not show any significant relationship with bank's total risk in India. In addition, total risk does not show any association with macroeconomic indicators such as GDP growth rate and inflation rate in our sample. Based on the findings, we proposed solvency model for Indian Banks.

Download or read book How Successful is the Indian Banking System in Upgrading to Basel III Some Exploratory Evidence written by Rohit Gupta and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The Basel III framework was introduced by the Bank for International Settlements (BIS after the 2008 financial crisis which revealed the shortcomings of the Basel II norms. All the countries are supposed to implement Basel III norms by March 2019. The Basel Committee has recognized that the capital adequacy of banks plays a critical role in banks' failure and has increased the total capital adequacy to 9%, of which Tier I capital is 7% and Tier II capital is 2%. Other than this, a countercyclical buffer has also been introduced, the implementation of which will start from 2015. The higher capital requirements are expected to raise certain challenges for the developing nations like India. The paper first analyzes the current situation of the Indian banks by classifying the banks into public sector banks and private sector banks, new banks and old banks, and domestic banks and MNCs, and then compares the results in each category. The paper then discusses that even though the Central Bank has done a great job in maintaining the capital adequacy, it does not necessarily imply that the banks are safe because despite adequate capital, banks can fail. The paper also discusses that it would not be easy for the banks to maintain capital adequacy once the countercyclical buffer requirements kick in. As the Government of India is the majority stakeholder in the public sector banks, the higher capital requirements could also impact the Indian economy negatively.

Download or read book Banks and Capital Requirements written by Benjamin H. Cohen and published by . This book was released on 2014 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Banks Adjustment to Basel III Reform written by Michal Andrle and published by International Monetary Fund. This book was released on 2017-02-20 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper seeks to identify strategies of commercial banks in response to higher capital requirements of Basel III reform and its phase-in. It focuses on a sample of nine EU emerging market countries and picks up 5 largest banks in each country assessing their response. The paper finds that all banking sectors raised CAR ratios mainly through retained earnings. In countries where the banking sector struggled with profitability, banks have resorted to issuance of new equity or shrunk the size of their balance sheets to meet the higher capital-adequacy requirements. Worries echoed at the early stage of Basel III compilation, namely that commercial banks would shrink their balance sheet by reducing their lending to meet stricter capital requirements, did materialize only in banks struggling with profitability.

Download or read book Managing the Sovereign Bank Nexus written by Mr.Giovanni Dell'Ariccia and published by International Monetary Fund. This book was released on 2018-09-07 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews empirical and theoretical work on the links between banks and their governments (the bank-sovereign nexus). How significant is this nexus? What do we know about it? To what extent is it a source of concern? What is the role of policy intervention? The paper concludes with a review of recent policy proposals.

Download or read book India and the Global Financial Crisis written by Y. Venugopal Reddy and published by Anthem Press. This book was released on 2010 with total page 414 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'India and the Global Financial Crisis' offers a collection of key speeches delivered by Reddy during his tenure as Governor of the Reserve Bank of India, and provides insights into the challenges facing the management of India's calibrated integration within the global economy.

Download or read book Estimating the Costs of Financial Regulation written by Mr.Andre Santos and published by International Monetary Fund. This book was released on 2012-09-11 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.

Download or read book Bank Size and Systemic Risk written by Mr.Luc Laeven and published by International Monetary Fund. This book was released on 2014-05-08 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: The proposed SDN documents the evolution of bank size and activities over the past 20 years. It discusses whether this evolution can be explained by economies of scale or “too big to fail” subsidies. The paper then presents evidence on the extent to which bank size and market-based activities contribute to systemic risk. The paper concludes with policy messages in the area of capital regulation and activity restrictions to reduce the systemic risk posed by large banks. The analysis of the paper complements earlier Fund work, including SDN 13/04 and the recent GFSR chapter on “too big to fail” subsidies, and its policy message is in line with this earlier work.

Download or read book Creating a Safer Financial System written by José Vinãls and published by International Monetary Fund. This book was released on 2013-05-14 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.S., the U.K., and more recently, the E.U., have proposed policy measures directly targeting complexity and business structures of banks. Unlike other, price-based reforms (e.g., Basel 3 and G-SIFI surcharges), these proposals have been developed unilaterally with material differences in scope, design and implementation schedules. This may exacerbate cross-border regulatory arbitrage and put a further burden on consolidated supervision and cross-border resolution. This paper provides an analysis of the potential implications of implementing different structural policy measures. It proposes a pragmatic and coordinated approach to development of these policies to reduce risk of regulatory arbitrage and minimize unintended consequences. In doing so, it also aims to identify a set of common policy measures that countries could adopt to re-scope bank business models and corporate structures.

Download or read book Implications from regulatory changes on the Swiss banking sector written by Stefan Stotz and published by GRIN Verlag. This book was released on 2016-04-18 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2013 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 5, Prifysgol Cymru University of Wales, course: MBA International Finance, language: English, abstract: Basel III has already had a major impact on the global finance sector. In this report I have analyzed the impact on the swiss banks, in particular the system relevant banks. In response to the latest global financial crisis, a number of regulatory policies such as Anti-Money Laundering (AML) and stringent compliance were adopted over the past years but the finance sector called for an international standard, a global regulation. The planned implementation of Basel Accords by January 1, 2019 focuses on much higher capital requirements as well as increased liquidity and funding requirements at the same time. The core goal of Basel III is to make sure that government will never have to bail out banks again as they did in many cases over the past years. This objective of this thesis is to analyze and describe the Basel III framework and focus on its implications on the banking industry, with a focus on the Swiss Banking Sector. The main challenges ahead for the banking sector due to the extensive regulatory changes are to review the profitability of their business models as intensification of compliance will bring pressure on bank’s profit margins. The report will describe how financial institutions will also have to review funding strategies and also deal with the impact of increased capital and liquidity costs. Further will the technical compliance with the new rules and required key ratios be a significant challenge in itself. This thesis will present the beginning of today’s regulatory set of regulations which began in July 1988 known as the Basel I Accord and explain the different intermediate stages until the newest regulatory framework: Basel III. The Basel III Accord will be gradually implemented over a transition period from 2013 - 2018. Further to analyzing the impact of the new Accord on the financial system and Switzerland in particular, this thesis will also review the sufficiency of different key ratios that have to be achieved by the Banks in order to meet the regulators standards and will provide key findings and suggestions for improvement for the body of rules to be more efficient and meaningful. The latest official financial statements by the Banks suggest that the system-relevant banks are well on the way of not only meeting the required standards but also to find alternatives to maintain current profitability. [...]

Download or read book From Basel I to Basel III Sequencing Implementation in Developing Economies written by Caio Ferreira and published by International Monetary Fund. This book was released on 2019-06-14 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Developing economies can strengthen their financial systems by implementing the main elements of global regulatory reform. But to build an effective prudential framework, they may need to adapt international standards taking into account the sophistication and size of their financial institutions, the relevance of different financial operations in their market, the granularity of information available and the capacity of their supervisors. Under a proportionate application of the Basel standards, smaller institutions with less complex business models would be subject to a simpler regulatory framework that enhances the resilience of the financial sector without generating disproportionate compliance costs. This paper provides guidance on how non-Basel Committee member countries could incorporate banks’ capital and liquidity standards into their framework. It builds on the experience gained by the authors in the course of their work in providing technical assistance on—and assessing compliance with—international standards in banking supervision.

Download or read book U S Implementation of the Basel Capital Regulatory Framework written by Darryl E. Getter and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This report summarizes the higher capital requirements for U.S. banks regulated for safety and soundness.

Download or read book A Study on Risk Management Practices in Public and Private Sector Banks written by N. Fathima Thabassum and published by Archers & Elevators Publishing House. This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Banking On Basel written by Daniel Tarullo and published by Columbia University Press. This book was released on 2008-11-30 with total page 327 pages. Available in PDF, EPUB and Kindle. Book excerpt: The turmoil in financial markets that resulted from the 2007 subprime mortgage crisis in the United States indicates the need to dramatically transform regulation and supervision of financial institutions. Would these institutions have been sounder if the 2004 Revised Framework on International Convergence of Capital Measurement and Capital Standards (Basel II accord)—negotiated between 1999 and 2004—had already been fully implemented? Basel II represents a dramatic change in capital regulation of large banks in the countries represented on the Basel Committee on Banking Supervision: Its internal ratings–based approaches to capital regulation will allow large banks to use their own credit risk models to set minimum capital requirements. The Basel Committee itself implicitly acknowledged in spring 2008 that the revised framework would not have been adequate to contain the risks exposed by the subprime crisis and needed strengthening. This crisis has highlighted two more basic questions about Basel II: One, is the method of capital regulation incorporated in the revised framework fundamentally misguided? Two, even if the basic Basel II approach has promise as a paradigm for domestic regulation, is the effort at extensive international harmonization of capital rules and supervisory practice useful and appropriate? This book provides the answers. It evaluates Basel II as a bank regulatory paradigm and as an international arrangement, considers some possible alternatives, and recommends significant changes in the arrangement.

Download or read book How the Proposed Basel Guidelines on Rating Agency Assessments Would Affect Developing Countries written by Giovanni Majnoni and published by . This book was released on 2016 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Basel Committee has proposed linking capital asset requirements for banks to the banks' private sector ratings. Doing so would reduce the capital requirements for banks that lend prudently in high-income countries; the same incentives would not apply in developing countries. Using historical data on sovereign and individual borrowers, Ferri, Liu, and Majnoni assess the potential impact on non-high-income countries of linking capital asset requirements for banks to private sector ratings, as the Basel Committee has proposed.They show that linking banks' capital asset requirements to external ratings would have undesirable effects for developing countries. First, ratings of banks and corporations in developing countries are less common, so capital asset requirements would be practically insensitive to improvements in the quality of assets - widening the gap between banks of equal financial strength in higher- and lower-income countries.Second, bank and corporate ratings in developing countries (unlike their counterparts in high-income countries) are strongly linked to the sovereign ratings for the country - and appear to be strongly related (asymmetrically) to changes in the sovereign ratings. A sovereign downgrading would bring greater changes in capital allocations than an upgrading, and would call for larger capital requirements at the very time access to capital markets was more difficult.Under the new guidelines, capital requirements in developing countries would thus be exposed to the cyclical swings associated with the revision of sovereign ratings in recent crises.Ultimately, linking banks' capital asset requirements to private sector ratings would reduce the credit available to non-high-income countries and make it more costly, limiting economic activity. Bank capital needs in developing countries would be more volatile than those in high-income countries.These findings suggest that the Basel Committee should reassess the role it proposes assigning to external ratings, to minimize the detrimental impact of the regulatory use of such ratings on developing countries. This paper - a product of the Financial Sector Strategy and Policy Department - is part of a larger effort in the department to study the impact of financial regulation on economic development. The authors may be contacted at [email protected] or [email protected].