The most comprehensive educational resources for finance

Basel III for Dummies

Basel III is the third Basel Accord from Bank of International Settlements. The objective of the Basel III accord is to strengthen the regulation, supervision and risk management of the banking sector. The new rules prescribe how to assess risks, and how much capital to set aside for banks in keeping with their risk profile.

A Comparative Assessment of Basel II/III and Solvency II

This reading is a part of the syllabus for FRM Part 2 Exam in the section ‘Operational and Integrated Risk Management’. This is a part of the regulatory readings. In the course of creating a single European market for financial services and in the wake of two financial crises, regulatory frameworks in the financial services

Simplicity, Risk Sensitivity and Comparability: The Regulatory Balancing Act

The is a speech given by Wayne Byres, the Secretary General at Basel Committee on banking Supervision. In his speech, Wayne Byres talks about finding the right balance for the amount of capital banks should keep as a part of Basel III norms – a suitable minimum amount of capital that was “just right” –

Basel III: Liquidity Coverage Ratio

To promote short-term resilience of a bank’s liquidity risk profile, the Basel Committee developed the Liquidity Coverage Ratio (LCR). This standard aims to ensure that a bank has an adequate stock of unencumbered  high quality liquid assets (HQLA) which consists of cash or assets that can be converted into cash at little or no loss

A Practical Guide to Fair Value and Regulatory CVA

In this presentation, Alexander Sokol provides an introduction to the concept of credit value adjustment (CVA), the rationale to CVA and how CVA helps to resolve many immediate problems. It also discusses the risk associated with CVA including the wrong way risk in CVA, and the Basel III capital charges for CVA. The author also

Reputational Risk Management

Reputational risk is defined as the current or prospective risk to earnings and capital arising from an adverse perception of financial institutions on the part of existing and potential transactional stakeholders, i.e. clients, trading counterparties, employees, suppliers, regulators/governmental bodies, and investors. This presentation explains what reputation risk is, how it arises, the regulatory requirements, and

An Overview of Basel III Framework

Basel III is a crucial regulatory response to the financial crisis and a major step forward towards creating a stronger and safer financial system. Basel III was developed expressly to reduce both the frequency and intensity of financial crisis. Studies indicate that the accord will lower the very significant economic costs of crisis. Such benefits

Basel III Counterparty Credit Risk – Frequently Asked Questions

The Basel Committee on Banking Supervision has received a number of interpretation questions related to the December 2010 publication of the Basel III regulatory frameworks for capital and liquidity and the 13 January 2011 press release on the loss absorbency of capital at the point of non-viability. The following document sets out the frequently asked

Basel III is simpler and stronger

The Basel Committee’s capital reforms, known as Basel III, substantially raise capital requirements from pre-crisis levels to reduce the probability of bank failures and the associated risks to taxpayers and to financial stability. Recently, much has been made of the perceived shortcomings of Basel III. Some argue that Basel III, which comes into effect next

Basel III Guidelines for India

India’s central bank, Reserve Bank of India, has issued the guidelines for implementation of Basel III capital regulations for banks in India. These guidelines will be effective from January 1, 2013 and the Basel III capital ratios will have to be fully implemented by March 31, 2018. This gives banks a period of 6 years.