Is Basel III Enough?

The global financial crisis concentrates on bank supervision. Due to the lack of effective bank supervision, an important part of this crisis responsibility is to solve such problems, to avoid future crises, or at least to reduce the severity of Basel's big Due to the next period of pressure. In essence, the Basel Consensus is designed primarily to measure the level of capital required to protect a bank from the risks associated with its assets. As such, Basel III, the latest contract, has significantly increased the capital requirement of banks and introduced other functions to improve the robustness of banking systems.

Basel III continues to promote improvements in banking operations. It is trying to increase the capacity of the savings department to expand the archives of Basel I and Basel II, manage currency concerns, strengthen opportunity management, and strengthen the directness of banks. Basel III will promote more pronounced versatility at the individual bank level with a specific goal of reducing the risk of shock factors within the framework. Basel III provides closer capital requirements than Basel I and Basel II. Bank management capital is divided into Tier 1 and Tier 2, Tier 1 is subdivided into Tier 1 and additional Tier 1 capital.

The regulatory CVA capital requirement under Basel III is an indicator of the 1999 VaR and the duration corresponds to one year. This can be explained by the fact that banks need to invest sufficient funds to handle 99 out of 100 CVA losses incurred within a year. International Financial Reporting Standards (IFRS) is a set of accounting standards developed by the International Accounting Standards Board (IASB). These accounting standards were introduced as world-wide business languages ​​to achieve comparable business problem accounting in an easy-to-understand manner. IFRS 13, which came into force in January 2013, requires fair value measurements based on market participant assumptions (EY, 2014). Fair value is defined as the price that will be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

European regulators have introduced Basel III to the bank. Capital ratio, leverage limit, narrow capital definition (excluding subordinated bonds), counterparty risk limitation, and new liquidity requirements. Critics believe that Basel III does not address the problem of risk weighted errors. According to Basel II, major banks are suffering from AAA level losses from financial institutions (creation of clear risk-free assets from high risk collateral) and therefore less capital. The risk of loan risk for AA-level sovereign states is zero, which increases the loan to the government and leads to the next crisis. John Norberg believes that regulations (such as Basel III) will lead to excessive loans to dangerous governments (see Europe's sovereign debt crisis), the European Central Bank pursues more financing as a solution To have