Selected Case Study:
1) Basel Agreement I
2) Basel Agreement II
3) Basel Agreement III
• Some questions to be used as a guideline for the research:
• What are the main failures in regulation that have been made evident by the current credit and banking crisis?
• What were the main objectives for the Basel I and II accords? Who was responsible for the implementation and supervision of these agreements?
• Find out the details on these agreements regarding the following risks: credit, market and operational risk, liquidity, leverage, solvency and systemic. How important has been the emphasis given by these agreement to a bank’s domestic, international and off-balance-sheet businesses? What operations where emphasized (in retail and investment banking), and what criteria was used
for assessing these risks? What is expected to be different in Basel III?
• How did the BIS justify the choices made in terms of capital requirements under Basel I and II? Why, how and when are provisions on liquidity, leverage and resolution been incorporated into the Agreement? What is expected to be different in Basel III?
• What have been the main criticisms made to Basel I and II? How did these agreements might have affected the financial performance and portfolio mixture of the international banks? Give examples. Refer to the importance of risk assessment models and the importance of credit rating agencies within Basel.
• Why was Basel insufficient to prevent the current banking crisis? Did Basel encourage any of the troublesome practices of banks during the boom period? Which ones, How, When?
• Give details of the most important changes to Basel I and II contained in the new regulatory proposals (Basel III).
• What progress has been achieved in the implementation of regulatory and supervisory systems in different countries and within the banks in order to fulfill the requirements of Basel III?
• How is Basel being affecting the structure, risk profile and performance of the financial institutions? How is the new Basel III will impact on these institutions and their operations in the next years? What other impacts are expected from the full implementation of Basel III?
• Provide some detail on any differences in the approaches to Basel III by different countries/regions (e.g., the UK, the US, the EU, China, Japan, Latin America)
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