StudentShare solutions
Triangle menu

Money and capital market - Essay Example

Free
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. It was mainly owing to the deficiencies of the financial institutions and the investors to assess the quality of the credit applicant, based on the variations observed in interest rates. In this context, there was a high need of switching into a new set of regulations that can avoid such crises situations, owing to the faulty decision making of financial institutions and investors (Lall, 2009). Gaps in Basel II It has been

Check these samples - they also fit your topic

Objectives of Risk Analysis in Financial Market
The globalization made world markets more integrated and provided more opportunities in overseas investments. Based on the instruments dealt in the market, financial market divides into money market and capital market. To maximize the profit, buyers are usually ready to take risk.
4 pages (1000 words) Essay
Distinguish between the money and capital markets
The total sum of funds represented by the financial markets can be classified under different segments, based on the characteristics of financial claims being traded and the imperatives of different participants.
2 pages (500 words) Essay
The Puerto Rican Community
The dominant culture in the region was the Taino’s but it died out with time due to exploitation by Spanish settlers not to mention wars and diseases resulting. Its major role was to host the military during the various wars between Spain and European powers.
3 pages (750 words) Essay
Money and capital market
There are various forms of monetary money responses that are helpful during occasions of economic stress. These responses are relevant to global economies. One example is the use of liquidity policies (Miriam, 2011, p. 5). This response policy is usually put in place by the central bank of a country to cushion against financial crisis.
3 pages (750 words) Essay
Introduction of market timing theory (capital structure)
One of its main suggestions is that managers can help in heightening the shareholders’ wealth by ensuring that they give a right timing to issues related to security. Most studies that have tested the market timing theory have found out that particular factors tend to affect security decisions for instance, interest rates and past stock prices.
3 pages (750 words) Essay
Money Market Mutual Funds
Money market mutual funds aim at limiting losses incurred because of market, liquidity, and credit risks. They preserve the principal in the investment and bring in modest dividends. Though there is fluctuation in the interest rates, the Net Asset Value of the funds remains at a $1 per share constant.
5 pages (1250 words) Essay
Financing of Working Capital and the Money Markets
In the end, the author presents the trade off between short term and long term finances for working capitals. In Croatia, banks form the primary source of financing for local businesses that are centrally regulated by the Croatian National Bank. Croatia possesses a short term liquidity market called Zagreb Money Market in which the banks and non-banks engage their liquidity surpluses to finance reliable entities to help them in their short term finance needs.
5 pages (1250 words) Essay
London Stock Market and Capital Budgeting
The reason that only a few walk on the road of entrepreneurship is because they know that their risk will pay off handsomely for them. For, their feasibility study and business acumen gives them that added instinct that they will come out of the business at the end of the day winning.
11 pages (2750 words) Essay
Capital Market
Treasury securities of any country are considered as the most secured investment for the investors because these are backed by government and with full faith. Therefore, these are also referred to as
6 pages (1500 words) Essay
Why people hold onto money
The value also represents the total number of variations of the model used. For instance, the coefficient of determination for the econometric model in quest is 0.958026537. This shows that there is 95.8% of variation of outcome of the econometric model. The
8 pages (2000 words) Essay
observed from the financial crisis of 2008 that Basel II was not capable enough to provide guarantee of financial stability for any particular region because of its limitations in terms of planning deficiencies. In fact, the implementation of Basel II contributed marginally towards the expansion of the crisis. In this regard, the example of Hong Kong would be noteworthy. The financial crisis reached to its obnoxious extent in the country, after the implementation of Basel II. In addition, the example of the decline of Lehman brothers will also justify the inefficiency of the Basel II framework. To be noted, the callable credit-linked notes offered by Lehman brothers were sold to more than 34,000 investors through banks. However, after the fall of the Lehman brothers, it was revealed that the banks were unable to depict the underlining uncertainty associated with such products, which further raised questions over the efficiency of the Basel II framework (SHEI, 2010). Furthermore, it was also argued that Basel II can only be beneficial for certain large banks with upgraded risk modelling systems. Additionally, the implementation procedure applied for the Basel II framework is quite complex for the banking and financial organizations, which further calls for transformation. It has also been noted that the success of Basel II directly requires the presence of consistent, accurate as well as the timely reporting of data. Thus, financial systems which have the absence of these aspects will not be able to effectively implement the framework. In addition, another issue associated with Basel II is its norm, which instructs only the banks to implement the same, can further influence the overall stability of the economy (Hai, Minhaj, & Ahmed n.d.). Positive Prospects of
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Money and capital market Essay Example | Topics and Well Written Essays - 750 words - 1”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/101587-money-and-capital-market
(Money and Capital Market Essay Example | Topics and Well Written Essays - 750 Words - 1)
https://studentshare.net/finance-accounting/101587-money-and-capital-market.
“Money and Capital Market Essay Example | Topics and Well Written Essays - 750 Words - 1”, n.d. https://studentshare.net/finance-accounting/101587-money-and-capital-market.
  • Cited: 0 times

Summary

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…
Money and capital market
Read Text Preview
Comments (0)
Click to create a comment
Let us find you another Essay on topic Money and capital market for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us