BASEL I, II, III: CHALLENGES TO THE BANKâ€(tm)S CAPITAL ADEQUACY

Tesu Ramona Vasilica ()

Annals of Faculty of Economics, 2013, vol. 1, issue 2, 463-471

Abstract: The present article has as a research field the theoretical, methodological aspects of the bankâ€(tm)s capital adequacy mechanism, according to Basel Agreement. The purpose of this paper is to underline the main challenges of the bankâ€(tm)s capital adequacy. The study reflects that the current global financial turmoil continues to pose a threat to the effectiveness of the Basel rules which are aimed at achieving global financial stability. Also, the present paper aims to reflects that in light of the Basel Accord, new and potent ally better financial ratios are being developed to prevent future banking crises from happening.The objectives of the research theme, presented in this paper, are oriented mainly towards: understand the role and importance of capital in a bankâ€(tm)s balance sheet and identify the composition and relative importance of the different measures of capital from a regulatory perspective (Core Capital, Tier 1 Capital and Tier 2 Capital); know the structure of the Basel Accord (minimum capital requirement, supervisory review process and market discipline) and the key principles of each; be aware of the enhancements to the Basel Accord from Basel III and interim amendments. The Basel III introduces paradigm shift in capital and liquidity standards. Firms should ensure they are engaging with Basel III as soon as possible to position themselves competitively in a new post-crisis financial risk and regulatory landscape. The National Bank of Romania offers to its users, informationâ€(tm)sâ€(tm) regarding the challenges to the bankâ€(tm)s capital adequacy through the Reports of Financial Stability and the Annual Reports. The present research is based on a deductive approach - strictly qualitative. For analyzing all the data I used the following research methods: comparative method, document analysis, external observation. I choose this subject for scientific reasons and realistic reasons. A result of this research tries to highlight the extent to which the final structure of capital bank, the requirements of capital banks. If we compare the analyses challenges of the three Accord Basel, we can see that the relationship: Capital requirement under Basel I

Keywords: Bankâ€(tm)s Capital Adequacy; Basel Accord I; Basel Accord II; Basel Accord III; Tier 1; Tier 2. (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2013
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