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Bank Supervision | Implementation of Basel Standards in Serbia | Basel III - NEW

Basel III

Following the identification of weaknesses in financial systems and drawbacks of Basel II standards accumulated during the world financial and economic crisis, the process of revising these standards began. The first steps were taken in July 2009, with the publication of the first set of documents – Enhancements to the Basel II framework, Revisions to the Basel II market risk framework and Guidelines for computing capital for incremental risk in the trading book. These amendments to Basel II standards concerned primarily market risks and securitisation. 

However, key and comprehensive amendments to Basel standards – Basel III standards were envisaged by a set of documents published in December 2010. New treatment concerns primarily capital adequacy ratio, in the part pertaining to regulatory capital (A global regulatory framework for more resilient banks and banking systems). Also, these documents introduce, for the first time, minimum standards concerning bank liquidity (International framework for liquidity risk measurement, standards and monitoring).

In June 2011 the final revised document on Basel III standards was published – A global regulatory framework for more resilient banks and banking systems – revised version, while January 2013 saw the publication of a full version of a revised document on liquidity ratio – Basel III: The Liquidity Coverage Ratio.

The key changes envisaged by Basel III standards concern:

  • Improving the quality of capital and strengthening capital requirements;
  • Introducing minimum standards on liquidity risk management, as well as minimum liquidity ratios;
  • Improving the risk management process in order to hold sufficient capital against all risks;
  • Introducing leverage ratio as an additional business indicator not based on the level of asset riskiness;
  • Taking a series of measures aimed at building-up most adequate capital buffers for periods of crisis. 

     
See More...
Strategy for Implementation of Basel III Standards in Serbia
Analysis of compliance of the domestic regulatory framework with Basel III requirements
Assessment of effects and determining the dynamics of implementation of Basel III standards