Basel III & European banking

• Main Authors: Kumar, Ritvik, Aggarwal, Tushar
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::Finance::Banking regulation
• Online Access: http://hdl.handle.net/10356/51332
• Institution: Nanyang Technological University

Basel III was a direct response to the Economic Crisis of 2008. There were far-reaching effects to the global economy even though banks were in compliance with Basel II. The new regulations aspire to improve the quality and depth of capital, shift the focus on liquidity and risk management, and make financial institutions more immune to adverse shocks. The main purpose of this paper is to seek to examine Basel III in Europe’s context. This has been done by throwing light on the details of the Basel III accord and how it is different from Basel II. To understand the requirements in Europe’s context, we try to inspect the major differences between Basel III and Europe’s Capital Requirements Directives – IV (CRD-IV), which is the European Union’s effort to implement Basel III, and assess the readiness of three major European Banks- UBS, Deutsche Bank and Credit Suisse in their implementation of Basel III capital and liquidity requirements. The paper then presents an analysis of the possible flaws of Basel III, and tries to identify which are the areas which Basel III is still lacking in. The new recommendations are a step in the right direction, but it may take much more to achieve the desired goal of a stable and safe financial system.