Basel III has been instrumental in fortifying the global banking system’s stability and resilience. By imposing stricter capital requirements, liquidity standards, and leverage ratios, Basel III ensures banks are more capable of withstanding economic downturns and financial shocks. The framework mandates a minimum Common Equity Tier 1 (CET1) ratio of 4.5% of risk-weighted assets and introduces a 2.5% capital conservation buffer. Continue reading “How Basel III Enhances Stability and Resilience in the Global Banking System”
How Do CRD IV and CRR Promote a Single Rulebook and Harmonize Banking Supervision Across the EU?
CRD IV and CRR play a pivotal role in harmonizing banking supervision across the EU by establishing a unified regulatory framework. They set consistent rules for capital adequacy, liquidity, and risk management for all deposit-taking institutions and investment firms within the EU. This single rulebook helps prevent regulatory arbitrage, ensuring that all institutions operate under the same standards and contributing to a stable and secure banking environment. Continue reading “How Do CRD IV and CRR Promote a Single Rulebook and Harmonize Banking Supervision Across the EU?”