Basel II, Basel III & the Financial Crisis – Bull by the Horns – a review.
Bull by the Horns: Fighting to save Main Street from Wall Street and Wall Street from itself by Sheila Bair, chronicles her tenure as FDIC Chairman from 2006 to 2011 during the Great Recession. It is a gripping read as [...]
Tag Archives: Basel II
Jawwad Farid
Every since the Basel and BIS Committee that formulates the Basel Standard announced a preference for exploring an alternate metric for Risk Management there has been a resurgence of interest in Shortfall methods. There has been a renewed focus on research some led by the NYU’s Volatility Labs on the topic of Capital [...]
In preparation for Basel III and the requirements for banks and insurance companies to hold higher (and better quality) minimum amounts of tier-1 capital, various responses/ reactions to the regulatory regime changes are being witnessed in different countries.
Convertible Preferred Shares
Issuing new equity is an expensive source of capital for an entity. According to the Australian [...]
The SAARC Finance policy response workshop on Basel II Enhancements
SBP, NIBAF and SAARC Finance organized a two day workshop on Basel III implementations and Central Banks policy response to these changes in the SAARC region. Four external speakers were invited to present to a panel of regulator and central bankers from India, Pakistan, Bangladesh, Nepal, [...]
Besides the two supervisory standards proposed in the Basel III liquidity reforms, the liquidity framework also presents 5 metrics that would be used by banks to monitor their liquidity position on a consistent basis. National supervisory authorities have the discretion of suggesting additional measures that could be used to monitor liquidity as well as act [...]
In our previous posts we had addressed the Liquidity Coverage Ratio, the short term resilience liquidity standard to be introduced with the Basel III reforms. In this post we discuss the long term supervisory measure for assessing liquidity risk, the Net Stable Funding Ratio (NSFR).
As mentioned earlier in our introductory post, this ratio aims to [...]
In our previous post on the reforms being brought to the liquidity framework by Basel III we had discussed the numerator of the first minimum funding liquidity ratio, LCR. In this post we will cover the elements of the denominator of that ratio, i.e. the total net cash outflows over the next 30 calendar days. [...]
In our previous post on the reforms being brought to the liquidity framework by Basel III we had discussed on a broad level the new minimum funding liquidity standards that would be applicable for the banking sector. In this post and the one to follow we discuss in more detail the first standard, i.e. the [...]
According to the reforms to the capital and liquidity framework, Basel III would require the banking sector to maintain and monitor two key minimum funding liquidity standards as part of the supervisory/ regulatory approach to managing liquidity risk. This would be in addition to the supervisory assessments that regulators would be required to undertake to [...]
I recently ran a presentation for a client where I had to justify setting risk limits at a pre-defined threshold for a treasury and investment management function, linking Stop Loss, Value at Risk and Management Action Triggers. The question a very astute board member asked me was a simple one:
How likely is this worst case [...]
