EVALUATION OF THE EFFECTIVENESS OF BASEL III REFORMS UNDER COVID-19

2021 ◽  
Vol 2 (5) ◽  
pp. 21-26
Author(s):  
F. Kh. SOZAEVA ◽  
Keyword(s):  
Positive Impact ◽  
Banking System ◽  
International Standards ◽  
Basel Iii ◽  
Work Program ◽  
Banking Systems ◽  
Basel Committee ◽  
Assessment Program ◽  
Banking Policy ◽  
Global Banking

The paper presents an assessment of the effectiveness of the Basel III reforms in the context of COVID-19. The paper analyzes the Post-Crisis Reform Assessment Program (2008–2009) and the two-year work program of the Basel Committee for 2021–2022, which sets out the strategic priorities of its activities in the field of banking policy, supervision and implementation. The conclusion is made about the positive impact of international standards on the security and resilience to the crisis of both individual banking systems and the global banking system.

scholarly journals Fintech Credit and Bank Efficiency: International Evidence

2021 ◽  
Vol 9 (3) ◽  
pp. 44
Author(s):  
Tu D. Q. Le ◽  
Tin H. Ho ◽  
Dat T. Nguyen ◽  
Thanh Ngo
Keyword(s):  
Positive Impact ◽  
Negative Relationship ◽  
Banking System ◽  
Bank Efficiency ◽  
Banking Systems ◽  
International Evidence ◽  
Global Banking ◽  
The World

The expansion of fintech credit around the world is challenging the global banking system. This study investigates the interrelationships between the development of fintech credit and the efficiency of banking systems in 80 countries from 2013 to 2017. The findings indicate a two-way relationship between them. More specifically, a negative relationship between bank efficiency and fintech credit implies that fintech credit is more developed in countries with less efficient banking systems. Meanwhile, a positive impact of fintech credit on the efficiency of banking systems suggests that fintech credit may serve as a wake-up call to the banking system. Therefore, fintech credit should be encouraged by the authorities around the world.

scholarly journals Phasing-in Basel III capital and liquidity requirements in post-revolution Egypt.

2012 ◽  
Vol 1 (3) ◽  
pp. 36-43
Author(s):  
Monal Abdel-Baki
Keyword(s):  
Banking Sector ◽  
Credit Rating ◽  
Banking System ◽  
Business Environment ◽  
Basel Iii ◽  
Macroeconomic Performance ◽  
Basel Committee ◽  
Global Banking ◽  
The Individual ◽  
The Impact

The Basel Committee has introduced a new set of capital and liquidity requirements to be introduced by the global banking system during 2013 till January 2019. Egypt possesses a well-capitalised banking sector, yet it has been exposed to the devastating shock imposed by its popular revolution. Using the GMM method, the impact of introducing the new capital and liquidity requirements on the macroeconomic performance of the Egyptian economy is examined. The results reveal that Egyptian banks are motivated to enhance capital and liquidity ratios in the case of realizing high profits and favourable conditions at the individual banking level. On the other hand, negative macroeconomic performance and a poor business environment substantially deter the preparedness of Egyptian banks to meet the Basel III requirements. The analysis is timely given the need for compliance with Basel III as one of the requirements to raise the credit rating of the devastated economy.

The Role of the Standardized Approach to Measuring the Counterparty Credit Risk Exposures (Basel III) in Order to Create Conditions for Russia’s Economic Growth

2019 ◽  
Vol 12 (3) ◽  
pp. 144-153
Author(s):  
I. E. Shaker
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Economies Of Scale ◽  
Positive Impact ◽  
International Standards ◽  
Public Confidence ◽  
Basel Iii ◽  
Credit Risks ◽  
Counterparty Credit Risk ◽  
System Risk

The subject of the researchis the Standardized Approach to measuring the Counterparty Credit Risk (SA-CCR) exposures according to the reform of the international standards of macroprudential regulation to ensure a breakthrough in the scientific, technological and socio-economic development of Russia. The purposeof the research was to assess the introduction and use of the post-crisis Basel III standard until 2021 to create financially sound credit and banking institutions as the main triggers of the system risk in order to maintain public confidence in the financial system and ensure sustainable economic growth. The paper examines the prospects for the implementation of the Basel III standard, taking into account the standardized approach to measuring the counterparty credit risk to meet the challenges of Russia’s entry into the top five world economies.Given the global financial market conditions, the economic growth is ensured by the economies of scale as well as by harmonization of structural macroprudential rules in different countries, which requires an international standardized approach to system risk management when macro-prudential policies are aimed at alleviating credit risks thereby having a positive impact on the economic growth.The effectiveness of the macro-prudential policy for banks is reduced when less regulated financial intermediaries increase the market share and openness allowing organizations and households to receive money from foreign financial sources.The paper concludesthat in shaping the country’s macro-prudential policies, it is necessary to assess the relative importance of each channel of manifestation and transformation of the system risk and its impact on the economic growth in the national economy.

Capital market development and bank efficiency: a cross-country analysis

2019 ◽  
Vol 15 (4) ◽  
pp. 478-491 ◽  
Author(s):  
Thanh Ngo ◽  
Tu Le
Keyword(s):  
Causal Relationship ◽  
Capital Market ◽  
Banking System ◽  
Market Development ◽  
Banking Efficiency ◽  
Content Type ◽  
Banking Systems ◽  
Global Banking ◽  
The World ◽  
The Capital Market

Purpose The purpose of this paper is to empirically investigate the causal relationship between banking efficiency and capital market development in 86 countries between 2006 and 2011. Design/methodology/approach The authors follow the two-stage framework: data envelopment analysis (DEA) with the use of financial ratios is used to arrive at efficiency scores of the banks in the first stage. Thereafter, those efficiency scores will be linked with the development level of the capital markets of the corresponding country in the second stage using the generalised method of moments in a simultaneous equations model. Findings The authors found that banking systems around the world were still inefficient, suggesting that it would take time for the global banking system to recover after the global financial crisis 2007/2008. More importantly, the findings demonstrated that the larger the capital market is, the less efficient its banking system would be. In contrast, banking efficiency can positively influence the development of the capital market. Research limitations/implications The data are unbalanced and limited to 86 countries; the study did not analyse the productivity change over time of those banking systems; and it would be useful to test the first-stage DEA with different sets of variables as well as different assumptions. Practical implications The paper suggests that for any economy around the world, an improvement in banking performance and efficiency rather than capital market development should be a priority, alongside with monitoring inflation. Originality/value The paper provides an unbiased analysis of the causal relationship between the banking sector and the capital market.

scholarly journals Geo-financial stability of the global banking system

2020 ◽  
Vol 15 (4) ◽  
pp. 164-178
Author(s):  
Galina Gospodarchuk ◽  
Nataliya Amosova
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
System Stability ◽  
Qualitative Assessment ◽  
Global Level ◽  
Banking Systems ◽  
Global Banking ◽  
The World ◽  
And Cluster Analysis ◽  
Analytical Tools

The development of globalization creates a need for diagnosis of financial stability at the global level. This study aims to analyze the financial stability of the global banking system and identify threats to stability at the level of geographic regions and countries. The study uses the methods of a structured system, comparative and cluster analysis. The empirical study is based on World Bank data for 126 countries for the period 1998–2017. One of the key results of the study is the development of quantitative indicators of the financial stability of the world banking system. These indicators differ from the existing ones due to the predictive nature of the former. The study also proposes criteria of qualitative assessment of the level of financial stability of the world banking system and its individual elements in the form of regional and national banking systems. In addition, appropriate algorithms were developed to calculate the proposed indicators and criteria. The results helped to form clusters of countries in terms of the level of their banking system stability, compile maps of financial stability risks at the global level, and identify countries that are sources of potential threats to financial stability. The empirical part of the study confirms the practical applicability of the proposed analytical tools. The study shows that in 2017, the banking system of Asian countries moved to the high-risk zone. Potential threats to the financial stability of the global banking system come from the European and Asian banking systems, as well as from the Australian banking system. AcknowledgmentThe study was funded by the RFBR according to the research project No 18 010 00232 “A methodology of multilevel system of diagnostics and regulation of financial stability” year 2018–2020.

scholarly journals Implementation of the Basel III and its effect on Bahrain’s banking sector.

2017 ◽  
Vol 15 (1) ◽  
pp. 224-234
Author(s):  
Maryam Abdulla Althawadi ◽  
Gagan Kukreja
Keyword(s):  
Banking Sector ◽  
Capital Requirements ◽  
Basel Iii ◽  
Financial Health ◽  
Banking Supervision ◽  
Complete Protection ◽  
Basel Committee ◽  
Banking Regulations ◽  
Global Banking ◽  
Research Findings

The financial crisis which occurred in 2007 and 2008 has had a major impact on the global banking industry. As a result, many banks went bankrupt or the governments had bailed them out. Thus, to protect banks against such a situation, the Basel Committee on Banking Supervision (BCBS) had scrutinized and altered the banking regulations, termed as the Basel III. The purpose of this study is to analyse the Basel III paradigm and its impact on the banks’ financial health of Bahrain. This kind of study will enhance the understanding of Basel III and its impact on banking sector for researchers of GCC in general and Bahrain in particular. The approach of the study is qualitative, whereas the theoretical framework has been used in the literature review. The empirical results were acquired from the interviews of various personnel from banks in Bahrain to gauge their perspective on Basel III paradigm. The overall perspectives of the banking personnel about Basel III were that it should have more stringent requirements. In this case, the capital requirements are considered to be too low and the risk weights are too unrealistic. However, majority of the banking personnel are still optimistic that Basel III does grant superior protection, but it doesn’t provide complete protection against the chance of failure. According to the research findings, majority of respondents were optimistic and feel that it does help in protecting the banks, while others consider it completely useless and failed to prevent failures.

scholarly journals Bolivia

2020 ◽  
pp. 239-259
Author(s):  
Peter Knaack
Keyword(s):  
Economic Growth ◽  
Financial Services ◽  
Regulatory Agency ◽  
Financial Stability ◽  
Legal Framework ◽  
Financial Inclusion ◽  
International Standards ◽  
Basel Iii ◽  
Left Wing ◽  
Basel Committee

Bolivia had ambitious plans to implement Basel standards, but these only partly came to fruition. A novel financial services law promulgated by the regulator in 2013 established the legal framework for a wholesale adoption of Basel II, including internal ratings-based components, and elements of Basel III. It is puzzling to see such a wholehearted embrace of Basel standards by a domestically oriented left-wing government that follows a heterodox approach to economic policymaking. Basel adoption has been driven by a regulatory agency embedded in transnational technocratic regulators networks and seeks to implement international standards. Bolivian regulators wrote a range of Basel rules into the draft legislation. But Bolivian politicians, prioritizing the goals of financial stability and inclusive growth, grafted onto this legislation significant interventionist policies. Thus, Bolivia’s Basel adoption is pulling in two directions: adherence to Basel Committee-style best practices and, concurrently, financial interventionism to stimulate economic growth and financial inclusion.

Basel III Norms: A SWOT and TOWS Approach

2017 ◽  
Vol 21 (3) ◽  
pp. 250-258 ◽  
Author(s):  
Samriti Kapoor ◽  
Mandeep Kaur
Keyword(s):  
Swot Analysis ◽  
Banking System ◽  
International Standards ◽  
Basel Iii ◽  
Global Risk ◽  
Alternative Strategies ◽  
Long Run ◽  
Regulatory Guidelines ◽  
Indian Banks ◽  
Cross Matching

Basel norms are international regulatory guidelines which have been introduced, updated and revised from time to time considering the need for more sound and stable banking system. Presently, Basel III has come into the scene in the wake of financial turmoil and inability of Basel II to address risks faced by banks. The purpose of the present study is to conduct a SWOT analysis of Basel III framework in order to find out its strengths, weaknesses, opportunities and major threats. The study also performs TOWS analysis to facilitate cross-matching among strengths, weaknesses, opportunities and threats. The study suggested that as Basel III is a global risk management phenomenon; hence Indian banks have to accept it to achieve harmonization with international standards. Thus, banks have to devise smart alternative strategies to implement it, as its adoption will ultimately benefit soundness and profitability of banks in the long run.

scholarly journals Basel III in Africa: making it work

2019 ◽  
Vol 10 (4) ◽  
pp. 401-407
Author(s):  
Peterson K. Ozili
Keyword(s):  
Design Methodology ◽  
Financial Regulation ◽  
Banking System ◽  
Basel Iii ◽  
Content Type ◽  
Balance Sheets ◽  
The World Bank ◽  
Global Banking ◽  
The International Monetary Fund ◽  
Policy Discussion

Purpose Basel III is a framework to protect the global banking system. The purpose of this paper is to provide a policy discussion on Basel III in Africa. Design/methodology/approach The significance of Basel III is discussed, and some ideas to consider when implementing Basel III to make it work in Africa, are provided. Findings Under Basel III, the African banking industry should expect better capital quality, higher capital levels, minimum liquidity requirement for banks, reduced systemic risk and differences in Basel III transitional arrangements. This paper also emphasizes that there should be enough time for the transition to Basel III in Africa; a combination of micro and macro-prudential regulations is needed; and the need to repair the balance sheets of banks, in preparation for Basel III. Originality/value The discussions in this paper will benefit policymakers, academics and other stakeholders interested in financial regulation in Africa such as the World bank and the International Monetary Fund.

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