Basel III B: Basel III Overview

Andrew Metrick
Authors registered in the RePEc Author Service: Michael Wedow

Journal of Financial Crises, 2019, vol. 1, issue 4, 59-69

Abstract: In the wake of the financial crisis of 2007-09, the Basel Committee on Banking Supervision (BCBS) faced the critical task of diagnosing what went wrong and then updating regulatory standards aimed at preventing it from occurring again. In seeking to strengthen the microprudential regulation associated with the earlier Basel Accords while also adding a macroprudential overlay, Basel III consists of proposals in three main areas intended to address 1) capital reform, 2) liquidity standards, and 3) systemic risk and interconnectedness. This case considers the causes of the 2007-09 financial crisis and what they suggest about weaknesses in the Basel regime as it then existed. It then summarizes the provisions of Basel III to allow for an evaluation of whether it was an effective response to the causes of the financial crisis.

Keywords: Basel III; BCBS; Global Financial Crisis; capital reform; liquidity standards; systemic risk; contagion; RWA; Net Stable Funding Ratio; Buffers; Leverage Ratio; LCR; HQLA; available stable funding; Bank for International Settlements; BIS (search for similar items in EconPapers)
JEL-codes: G01 G28 (search for similar items in EconPapers)
Date: 2019
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ysm:ypfsfc:1444

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