What is Basel reporting?
Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation, supervision and risk management of banks.
What are the requirements in Basel II?
Basel II uses a “three pillars” concept – (1) minimum capital requirements (addressing risk), (2) supervisory review and (3) market discipline. The Basel I accord dealt with only parts of each of these pillars.
What are the important differences between Basel 1 and 2 norms?
The key difference between Basel 1 2 and 3 is that Basel 1 is established to specify a minimum ratio of capital to risk-weighted assets for the banks whereas Basel 2 is established to introduce supervisory responsibilities and to further strengthen the minimum capital requirement and Basel 3 to promote the need for …
What is the difference between Basel 2 and 3?
The key difference between the Basel II and Basel III are that in comparison to Basel II framework, the Basel III framework prescribes more of common equity, creation of capital buffer, introduction of Leverage Ratio, Introduction of Liquidity coverage Ratio(LCR) and Net Stable Funding Ratio (NSFR).
What is the full form of Nsfr?
The net stable funding ratio is a liquidity standard requiring banks to hold enough stable funding to cover the duration of their long-term assets. Banks must maintain a ratio of 100% to satisfy the requirement. …
What is Basel II operational risk?
Definition. The Basel Committee defines operational risk in Basel II and Basel III as: The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk.
How is NSFR calculated?
The NSFR presents the proportion of long term assets funded by stable funding and is calculated as the amount of Available Stable Funding (ASF) divided by the amount of Required Stable Funding (RSF) over a one-year horizon.
What does NSFR measure?
NSFR, net stable funding ratio The NSFR is defined as the ratio between the amount of stable funding available and the amount of stable funding required.
How does Solvency II differ from Basel II regulations?
Solvency II is broader than Basel II/III in that it is a total Balance Sheet approach incorporating assets and liabilities whereas Basel II/III concentrates on Credit, Market and Operational risk. One of the key components of Basel II was to increase the amount of capital banks had to hold against riskier assets.