The Role of Basel Accords in Preventing the Banking System Failure
Asem Tahtamouni, Fouzan Al Qaisi
Abstract
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Asem Tahtamouni, Fouzan Al Qaisi
Abstract
Open-access reader
The Basel Accords are principles and recommendations on banking laws and regulations published by the Basel Committee on Banking Supervision (BCBS). This paper aims to examine the three accords of Basel Committee and their roles in improving the Banking system and preventing it from any failure. To do this, the paper examines the performance of these accords pre, during and post the 2008 Global Financial Crisis (GFC).Most regulatory systems have adopted the Basel standards. Basel I focused on Credit Risk; Basel II on Market and Operational Risks; and following the 2008 GFC, Basel III focused on Liquidity Risk.
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The Basel Accords are principles and recommendations on banking laws and regulations published by the Basel Committee on Banking Supervision (BCBS). This paper aims to examine the three accords of Basel Committee and their roles in improving the Banking system and preventing it from any failure. To do this, the paper examines the performance of these accords pre, during and post the 2008 Global Financial Crisis (GFC).Most regulatory systems have adopted the Basel standards. Basel I focused on Credit Risk; Basel II on Market and Operational Risks; and following the 2008 GFC, Basel III focused on Liquidity Risk.
Key concepts: Basel I, Basel II, Operational risk, Basel III, Risk-weighted asset, Financial system, Business, Risk-adjusted return on capital