BASEL III: REDESIGNED REGULATORY FRAMEWORK FOR BANKS

Jelena Birovljev, Milivoje Davidović and Biljana Štavljanin
Additional contact information
Jelena Birovljev: University of Novi Sad, Faculty of Economics Subotica
Milivoje Davidović: University of Novi Sad, Faculty of Economics Subotica
Biljana Štavljanin: University of Novi Sad, Faculty of Economics Subotica

Serbian Association of Economists Journal, 2012, issue 3-4, 140-148

Abstract: The global financial crisis has confirmed the global regulatory mechanism weakness in the prevention of the causes and consequences in stress situations. As an expression of inadequacy, Basel Committee designed Basel III standard as a new regulatory framework for banks. Its implementation involves the compliance of strict capital requirements, liquidity standards and leverage. Researches about the effects of Basel III standards indicate that a shorter time horizon, these are the consequences for economic growth is greater. For the four-year implementation period, the increase in capital requirements for the 1% would result in a reduction in global GDP by 0.1%, while the largest drop in GDP would be recorded after 18th quarter and amounted to 0.19%. Also, during the implementation horizon cross-country spillover effect will occur that would be stronger in developing countries relative to developed countries and amounted to 0.03%. Based on the above, pure effect of increasing capital requirements on the reduction of world GDP is estimated to 0.016%.

Keywords: Basel III; capital adequacy; capital conservation buffer; countercyclical buffer; leverage ratio; liquidity standards (search for similar items in EconPapers)
JEL-codes: E00 (search for similar items in EconPapers)
Date: 2012
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ses.org.rs/ekonomika-preduzeca/2012-3-4-02.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:srb:journl:y:2012:i:3-4:p:140-148

Access Statistics for this article

More articles in Serbian Association of Economists Journal from SAE - Serbian Association of Economists Contact information at EDIRC.
Bibliographic data for series maintained by Milos Stamatovic ().