Option B: Basel III � Issues and implications
Under Basel, banks can determine how much debt they can take on by using their own models and computer systems to calculate how risky their assets are, among other methods. The higher the risk, the less money banks can borrow and lend, in turn cutting income banks can earn. In other words, this part of the Basel rules, known as the �internal-ratings based approach,� gives banks a chance to monkey with their risk models to boost profit.
Fed Governor Daniel Tarullo
You have been assigned the task of investigating the implications of the implementation of Basel III to the Chief Financial Officer (CFO) of the banking institution you are working for.
Ensuring banks� future:
Using the Cosimano and Hakura (2011) article on bank behaviour in response to the new Capital Accord for banks as the starting point , write a 2,000-word business report on the following:
a. Discuss critically the background to Basel III and impact on individual banks and the financial global system.
b. What has been the impact of the new capital requirements in relation to banks� lending activity around the world?
c. Discuss the concept of �countercyclical capital� and the new �leverage ratio� and their likely effects on banks and the banking system as a whole.
Learning outcomes tested by the report
� Understand and explain the developments in banking regulations in relation to capital requirements.
� Appreciate the importance of countercyclical capital in banking regulation.
� Familiarise yourselves with the impact of regulatory changes on bank capital.
� Explain and analyse the policies adopted by different banks in different countries in relation to implementing the new capital rules.
� Critically analyse the current challenges in the area of capital requirement regulation.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more