Basel III - Global Regulatory Framework for more Resilient Banks and Banking Systems
About the Lecture
The lecture Basel III - Global Regulatory Framework for more Resilient Banks and Banking Systems by Edu Pristine is from the course Archiv - Operational Risk. It contains the following chapters:
- AIM Statements
- Reasons for changes implemented through the Basel III framework
- Changes to the Regulatory Capital Framework
- Reducing procyclicality and promoting countercyclical buffers
- Handling of systemic risk and interconnectedness
- Improving Liquidity Risk Management
Author of lecture Basel III - Global Regulatory Framework for more Resilient Banks and Banking Systems
Edu Pristine
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Excerpts from the accompanying material
... framework, including changes to: - The measurement, treatment and calculation of Tier 1, Tier 2, and Tier 3 capital. - Risk coverage, the use of stress tests, the treatment of counter-party risk with credit valuation adjustments the ...
... balance sheet assets as well as a reduction in the credit quality of underlying capital base. The crisis was also amplified by the presence of a procyclical deleveraging process and by the interconnectedness of systemic institutions. The framework aims to strengthen the global capital framework through: - Raising the quality, ...
... Tier 1 capital (going-concern capital) - Common Equity Tier 1 - Additional Tier 1 - Tier 2 capital (gone -concern capital) - Tier 3 capital will be abolished. Common Equity Tier ...
... exposures arising from derivatives, repos and securities financing activities. The enhancements attempt at reducing the shocks that are transmitted from one financial institute to another through the derivative and financing channels. The Committee proposed introducing a leverage ratio which ...
... as a credible supplementary measure to the risk based requirements. The committee identified a few negative incentives which are a result of the excessive use of external ratings ...
... the growth of system wide risk. - The bank specific capital buffer for an internal bank is the weighted average of the requirements that are being applied in jurisdictions to which bank has credit exposures. ...
... institutions led to the transmission of negative shocks throughout the economy. The Committee is examining approaches to assist supervisors in ...
... longer-term structural liquidity ratio. The framework also includes a set of common monitoring metrics to assist supervisors in identifying ...
... is envisioned although not a worst-case scenario. - Significant downgrade in credit rating - Partial loss of deposit - Loss of unsecured wholesale funding - Significant increase in secured funding haircuts - Increase in derivative collar calls and substantial calls on a ...
... much the bank is depended on the source of funding. Available unencumbered assets: Measures the number of unencumbered assets that can be used as a collateral for secured funding. ...
