Analyzing Trend of Capital Adequacy and Basel Standard using Text Mining Technique

Capital adequacy ratio is widely discussed among the banking institution as they must secure certain amount as required by financial regulator. It represents the percentage of risk-weighted asset and act as the indication of no excess leverage should be hold by them. Therefore the Basel Committee has designed Basel l, Basel ll and Basel lll for banking institution as a reference to ensure the capital requirement is sufficient in minimizing the operational risk. This study aims to analyze the trend and pattern on capital adequacy and its execution in banking system in Japan after the introduction of Basel Standard. The study covered the 11 years articles published in Nikkei 21 from 2004 to 2014 by using text mining and correspondence analysis as a methodology. RMeCab and MeCab in R statistical tools were used and it leads to present the importance of Basel Standard as guidance in determining the level of capital adequacy ratio.