Basel III has already had a major impact on the global finance sector.
In this report I have analyzed the impact on the swiss banks, in particular the system relevant banks.
In response to the latest global financial crisis, a number of regulatory policies such as Anti-Money Laundering (AML) and stringent compliance were adopted over the past years but the finance sector called for an international standard, a global regulation. The planned implementation of Basel Accords by January 1, 2019 focuses on much higher capital requirements as well as increased liquidity and funding requirements at the same time. The core goal of Basel III is to make sure that government will never have to bail out banks again as they did in many cases over the past years. This objective of this thesis is to analyze and describe the Basel III framework and focus on its implications on the banking industry, with a focus on the Swiss Banking Sector.
The main challenges ahead for the banking sector due to the extensive regulatory changes are to review the profitability of their business models as intensification of compliance will bring pressure on bank’s profit margins. The report will describe how financial institutions will also have to review funding strategies and also deal with the impact of increased capital and liquidity costs. Further will the technical compliance with the new rules and required key ratios be a significant challenge in itself.
This thesis will present the beginning of today’s regulatory set of regulations which began in July 1988 known as the Basel I Accord and explain the different intermediate stages until the newest regulatory framework: Basel III. The Basel III Accord will be gradually implemented over a transition period from 2013 - 2018. Further to analyzing the impact of the new Accord on the financial system and Switzerland in particular, this thesis will also review the sufficiency of different key ratios that have to be achieved by the Banks in order to meet the regulators standards and will provide key findings and suggestions for improvement for the body of rules to be more efficient and meaningful.
The latest official financial statements by the Banks suggest that the system-relevant banks are well on the way of not only meeting the required standards but also to find alternatives to maintain current profitability. [...]
Inhaltsverzeichnis (Table of Contents)
- Executive Summary
- Introduction
- Section 1: Basel I & Basel II
- 1.1 Basel I
- 1.1.1 Origin of Basel Accord
- 1.1.2 The Four Pillars of Basel I Accord
- 1.1.3 Basel I: Success and Criticisms
- 1.2 Basel II
- 1.2.1 The Three Pillars of Basel II Accord
- 1.2.2 Basel II: Success and Criticisms
- 1.1 Basel I
- Section 2: The Financial Crisis
- 2.1 The Causes of the Financial Crisis
- 2.2 Basel II as a catalyst to the financial crisis?
- 2.3 Financial Crisis and the Swiss Banking Industry
- Section 3: Basel III
- 3.1 Key Focus areas of Basel III
- 3.2 How Basel III has tried to overcome drawbacks of Basel II
- 3.3 Concerns of Basel III
- 3.4 Basel III and its expected Impact on Europe
- 3.4.1 Impact on European banks
- 3.4.2 Business Impact of Basel III
- 3.4.3 The Swiss Banking Industry
- 3.4.4 Analysis of financial results
- Section 4: Central Banks and the Regulatory Impact
- 4.1 Impact on Monetary policy
- 4.2 Impact on Fiscal policy
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This dissertation aims to analyze the Basel III framework and its implications on the banking industry, with a particular focus on the Swiss Banking Sector. The analysis will examine the impact of Basel III on the profitability of banking business models, funding strategies, and compliance requirements.
- The evolution of Basel Accords from Basel I to Basel III.
- The impact of Basel III on the Swiss banking industry.
- The challenges and opportunities presented by Basel III for Swiss banks.
- The effectiveness of Basel III in mitigating future financial crises.
- The role of central banks in implementing and enforcing Basel III regulations.
Zusammenfassung der Kapitel (Chapter Summaries)
The dissertation begins by providing an overview of the Basel Accords, starting with Basel I and its evolution through Basel II. It examines the successes and criticisms of each accord, highlighting the key drivers behind their development.
The second section delves into the global financial crisis, exploring its causes and the potential role of Basel II in contributing to it. This chapter also analyzes the impact of the crisis on the Swiss banking industry.
The third section focuses on Basel III, outlining its key focus areas and how it addresses the shortcomings of Basel II. It explores the concerns surrounding Basel III and its anticipated impact on European banks, particularly the Swiss banking industry. This section also includes an analysis of financial results to assess the effectiveness of Basel III.
The final section examines the role of central banks in implementing and enforcing Basel III regulations, analyzing the impact on monetary and fiscal policies. This chapter provides insights into the broader regulatory landscape and its implications for the banking sector.
Schlüsselwörter (Keywords)
This dissertation focuses on the Basel III framework, its implications for the Swiss banking industry, and the broader regulatory landscape. Key terms and concepts include: Basel Accords, banking regulation, capital requirements, liquidity, risk management, financial crisis, Swiss banking sector, central bank policy, monetary policy, fiscal policy, and regulatory compliance.
- Quote paper
- Stefan Stotz (Author), 2013, Implications from regulatory changes on the Swiss banking sector, Munich, GRIN Verlag, https://www.grin.com/document/320807
