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Author: Mark Petersen
Publisher: Business Expert Press
ISBN: 1606498738
Category : Business & Economics
Languages : en
Pages : 132
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Book Description
Liquidity involves the degree to which an asset can be bought or sold in the market without affecting its price. The 2007 to 2009 financial crisis was characterized by a decrease in liquidity and necessitated the introduction of Basel III capital and liquidity regulation in 2010. Inside, you’ll learn how such regulations are applied on a broad crosssection of countries in order to understand and demonstrate the implications of Basel III. This book summarizes the defining features of the Basel I, II, and III Accords and their perceived shortcomings, as well as the role of the Basel Committee on Banking Supervision (BCBS) in promulgating international banking regulation. Basel III quantifies liquidity risk by using the measures liquidity coverage ratio (LCR) and net stable funding ratio (NSFR). This book discusses approximation techniques that may be used to estimate these liquidity measures. Inside, the authors highlight the connections between liquidity creation and bank capital and provide you with the details of an investigation of the risks liquidity creation generates for banks. In addition, we consider the impact of the implementation of Basel III liquidity regulation on macroeconomic variables such as GDP, investment, inflation, consumption, income, savings, and employment.
Author: Mark Petersen
Publisher: Business Expert Press
ISBN: 1606498738
Category : Business & Economics
Languages : en
Pages : 132
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Book Description
Liquidity involves the degree to which an asset can be bought or sold in the market without affecting its price. The 2007 to 2009 financial crisis was characterized by a decrease in liquidity and necessitated the introduction of Basel III capital and liquidity regulation in 2010. Inside, you’ll learn how such regulations are applied on a broad crosssection of countries in order to understand and demonstrate the implications of Basel III. This book summarizes the defining features of the Basel I, II, and III Accords and their perceived shortcomings, as well as the role of the Basel Committee on Banking Supervision (BCBS) in promulgating international banking regulation. Basel III quantifies liquidity risk by using the measures liquidity coverage ratio (LCR) and net stable funding ratio (NSFR). This book discusses approximation techniques that may be used to estimate these liquidity measures. Inside, the authors highlight the connections between liquidity creation and bank capital and provide you with the details of an investigation of the risks liquidity creation generates for banks. In addition, we consider the impact of the implementation of Basel III liquidity regulation on macroeconomic variables such as GDP, investment, inflation, consumption, income, savings, and employment.
Author: Ansgar Wittenbrink
Publisher: GRIN Verlag
ISBN: 3640919270
Category : Business & Economics
Languages : en
Pages : 88
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Book Description
Master's Thesis from the year 2011 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, University of Applied Sciences Essen, course: General economics, language: English, abstract: The global financial crisis which began in mid-2007 revealed the significant risks posed by large, complex and interconnected institutions and the fault-lines in the regulatory and oversight systems. The drying up of market liquidity caused lacks of funding for financial institutions and their reactions to the market stress increased the market tensions which highlighted the strong link between banks funding liquidity and market liquidity. Over the past two decades preceding the crisis, banks in advanced countries significantly expanded in size and increased their outreach globally. In many cases, they moved away from the traditional banking model towards globally active large and complex financial institutions. The majority of cross-border finance was intermediated by some of these institutions with growing interconnections within and across borders. The result were trends in the banking industry which include a sharp rise in leverage, significant reliance on short-term funding, significant off-balance sheet activities, maturity mismatches and increased share of revenues from complex products and trading activities. This development has moved on to a systematic risk and it has been identified a need in the financial sector to measure those aspects, to assess the resilience of the financial sector to liquidity shocks and give guidance to the policy of central banks and regulators. At the same time, the financial industry has started a fast process of consolidation worldwide. Regulators, organized in the Basel Committee on Banking Supervision (BCBS) have responded to the financial crisis by proposing new regulation which is known as “Basel III”. The reform program leads to fundamental changes and implements capital and liquidity reforms. The liquidity reform represents the first attempt by international regulators to introduce harmonized liquidity minimum standards for financial institutions. Extensive efforts through the Basel Committee, with the “Basel III” program, are being considered internationally and domestically to revise these deficiencies and failures, in order to safeguard the stability of the financial system. The key objective is to promote a less leveraged, less risky, and thus a more resilient financial system that supports strong and sustainable economic growth. The bulk of the proposals have focused on revising existing regulations applicable to financial institutions and to influence the extent and consequences of their risk taking.
Author:
Publisher: Lulu.com
ISBN: 9291316695
Category : Bank capital
Languages : en
Pages : 294
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Book Description
Author: Daniel Hosp
Publisher: GRIN Verlag
ISBN: 3656325561
Category : Business & Economics
Languages : en
Pages : 57
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Book Description
Bachelor Thesis from the year 2011 in the subject Business economics - Investment and Finance, grade: 1, University of Innsbruck (Banken und Finanzen), language: English, abstract: 1. Introduction On 6 September 2009 the Central Bank Governors and Heads of Supervision agreed on Basel III after the financial crisis proved that Basel II was not capable of preventing the global economy from such a crisis (BCBS, 2008). Basel III is the third version of the international regulatory framework for financial institutions published by the Basel Committee of Banking Supervision (BCBS) of the Bank for International Settlements (BIS) located in Basel, Switzerland (BIS, www.bis.org, 30.04.2011).... .... This bachelor thesis should provide some deeper information about the impacts of the new liquidity measures. The impact of the standards on economy, financial institutions and their business segments is presented, after a detailed explanation of them. Concluding a comprehensive evaluation of the new requirements is done. 2. Developments in Basel III 2.1. Increasing Capital Requirements 2.2. Liquidity Coverage Ratio 2.3. Net Stable Funding Ratio 2.4. Monitoring Tools and Application of Standards 3. Initial Situation of Banks Regarding Liquidity Requirements 3.1. Quantitative Impact Study of the BCBS 3.2. European Quantitative Impact Study of the CEBS 3.3. Comparison of Results 4. Economic Impacts of the New Liquidity Requirements 4.1. Benefits of the New Liquidity Requirements 4.2. Costs of the New Liquidity Requirements 4.3. Evaluation of the Results 5. Impact of the Liquidity Requirements on Banks and their Business Segments 5.1. Changed Market Conditions 5.2. Impact on the Profitability of Banks 5.3. Impact on Business Segments 5.4. Impact on Central Banks 5.5. Overall Impacts on Banks and Business Segments 6. Evaluating the Liquidity Rules of Basel III 6.1. Static Nature of the Liquidity Measures 6.2. Are Wrong Incentives the Actual Causer? 6.3. Introduction of Basel III in Various Countries 6.4. Additional Comments 7. Conclusion
Author: Guoxiang Song
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
Basel III introduces the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) to enhance bank liquidity regulation. This paper investigates whether accounting rules have pro-cyclical effects on these liquidity requirements. By rearranging the formulae for the LCR and the NSFR, this paper develops simplified models for examining such effects. Because of the linkages among accounting rules, capital rules and liquidity ratios, recurring fair value measurements are found to have pro-cyclical effects on both the LCR and the NSFR whereas the provision for loan losses is found to have positive effects on the NSFR although it has little impact on the LCR. The expected loss (EL) model for loan loss provisioning will introduce a new pro-cyclical impact on the NSFR even though it will lessen the pro-cyclical impact of the incurred-loss impairment model on the leverage ratio. Therefore, the contribution of accounting rules to the pro-cyclicality in the regulatory system will be enhanced as the paper also finds that the Basel III liquidity rules and the Basel III capital rules will reinforce each other's pro-cyclicality.
Author: Mr.Sami Ben Naceur
Publisher: International Monetary Fund
ISBN: 1484329198
Category : Business & Economics
Languages : en
Pages : 54
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Book Description
Using data on commercial banks in the United States and Europe, this paper analyses the impact of the new Basel III capital and liquidity regulation on bank-lending following the 2008 financial crisis. We find that U.S. banks reinforce their risk absorption capacities when expanding their credit activities. Capital ratios have significant, negative impacts on bank-retail-and-other-lending-growth for large European banks in the context of deleveraging and the “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending-growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies.
Author: Walter W. Eubanks
Publisher: DIANE Publishing
ISBN: 1437943489
Category :
Languages : en
Pages : 16
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Book Description
The new Basel Capital Adequacy Accord (Basel III) is an agreement among countries' central banks and bank supervisory authorities on the amount of capital banks must hold as a cushion against losses and insolvency. Basel III is of concern to Congress mainly because it could put U.S. financial institutions at a competitive disadvantage in world financial markets. This report follows the basic elements of the Basel III documents on the types of capital requirements and their phase-in schedule, which were approved by the Basel member central bank governors on September 12, 2010. The elements are the new definition of Tier 1 capital, the minimum common equity capital, the capital conservation buffer, countercyclical capital buffer, liquidity coverage ratio, global leverage ratio, and wind-down government capital injections. The report concludes with some implications drawn from its content.
Author: Gaston Giordana
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: Stefan Stotz
Publisher: GRIN Verlag
ISBN: 3668199345
Category : Business & Economics
Languages : en
Pages : 76
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Book Description
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. [...]
Author: Laura Chiaramonte
Publisher: Springer
ISBN: 3319944002
Category : Business & Economics
Languages : en
Pages : 213
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Book Description
One of the lessons learned from the Global Financial Crisis of 2007–9 is that minimum capital requirements are a necessary but inadequate safeguard for the stability of an intermediary. Despite the high levels of capitalization of many banks before the crisis, they too experienced serious difficulties due to insufficient liquidity buffers. Thus, for the first time, after the GFC regulators realized that liquidity risk can jeopardize the orderly functioning of a bank and, in some cases, its survival. Previously, the risk did not receive the same attention by regulators at the international level as other types of risk including credit, market, and operational risks. The GFC promoted liquidity risk to a significant place in regulatory reform, introducing uniform international rules and best practices. The literature has studied the potential effects of the new liquidity rules on the behaviour of banks, the financial system, and the economy as a whole. This book provides a comprehensive understanding of the bank liquidity crisis that occurred during the GFC, of the liquidity regulatory reform introduced by the Basel Committee with the Basel III Accord, and its implications both at the micro and macroeconomic levels. Università Cattolica del Sacro Cuore contributed to the funding of this research project and its publication.
