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money and capital market - Essay Example
Author : davisgloria
Finance & Accounting
Pages 3 (753 words)
Money and Capital Market Table of Contents Table of Contents 2 Introduction 3 Discussion 3 Basel Accords 3 Factors that Led to Transformation from Basel II to III 4 Gaps in Basel II 4 Positive Prospects of Basel III 5 Conclusion 6 References 7 7 Introduction The significance of commercial banks in financial system can be depicted from the fact that they are among the most important financial institutions that operate in any particular region…
With reference to this, the paper will discuss about the challenges and issues associated with Basel II, which further led to the proposal of replacing it with Basel III. Discussion Basel Accords Basel Accords refer to a set of banking regulations issued by Basel Committee on Banking Supervision (BCBS). The association has developed three Basel accords till date, which comprise of Basel I, II and III. The first Basel accord was introduced in the year 1988. By the year 2008, Basel II came into existence and was readily accepted in various regions of the world. However, owing to certain facets, BCBS proposed a transformation from Basel II to III in the year 2013 (Lall, 2009). Factors that Led to Transformation from Basel II to III On the grounds of the causes in respect of the recent 2008 global financial crisis, critics have argued many limitations of the regulations enforced in accordance with the Basel II standards. In this regard, the sub-prime lending deficiency that gave rise to the historic housing bubble in the global economy can be illustrated as a good example. ...