The Accordance of Basel in regards to Banking laws and regulations - Free Essay Example

Sample details Pages: 6 Words: 1921 Downloads: 7 Date added: 2017/06/26 Category Business Essay Type Research paper Did you like this example? Basel Accords which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision consists of Basel I, Basel II and Basel III. Basel I was adopted in 1988 and was enforced internationally in 1992. While Basel I is now outdated, Basel II was formed and implemented by a lot of countries. Don’t waste time! Our writers will create an original "The Accordance of Basel in regards to Banking laws and regulations" essay for you Create order Soon after that Basel III came into place when the world was faced with Global Financial Crisis. Basel I primarily focused on credit risk. This Accord was enforced by law in Group of Ten (G-10) countries which included Belgium, Canada, France, Germany, Italy, Japan, United Kingdom, United States of America, Spain, Switzerland, Sweden, Netherlands and Luxembourg. Basel II is the second of Basel accords issued by the Basel committee on Banking Supervision. This framework was officially known as International Convergence of Capital Measurement and Capital Standards. The main purpose of Basel II, published in June of 2004, was to create an international standard that banking regulators would be able to use when creating regulations about the amount of capital that banks need to put aside to guard them against the financial and operational risks that most banks face. Australia implemented Basel II framework on January 1 2008 through its Australian Prudential Regulation Authority The 3 fundamental pillars of Basel II include: Pillar 1: It deals with the Minimum Capital Requirement calculation which has to be maintained against Credit, Operational and Market risk. Pillar 2: It deals with the Supervisory Review Process which describes the principles for effective supervision. Pillar 3: It deals with the need for Market Discipline which requires the lenders to widely provide details of their risk rating processes, risk management activities and risk distributions. Basel III was recently developed after taking in consideration the loopholes and weaknesses that contributed to the financial crisis. Basically, these rules intend to protect the world economy from the possible effects of any future financial crisis. In addition to that, they also aim to reduce the risk that would be imposed on governments to spend funds while protecting banks and their creditors. The new rules of Basel III seek to avoid the failure of Basel II -Imperfect and under-a dopted rules now are no longer in use after the 2008 global financial crisis. It takes a more critical view of leverage in general, and of risk insurance and trading in debt between banks and other players. They ask the banks to hold a larger buffer of capital, and more liquid assets. The most important changes in Basel III comprise of: ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Setting higher minimum capital requirements and changes to Tier 1 capital rules ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Strengthening both the quantum and quality of capital for banks and insurance companies ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Improving mechanisms for dealing with systemic risk found in the financial system ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Enhancing the system and institutions abilities to cope with liquidity shocks which have occurred throughout the GFC ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Improving forward-looking approaches to loan loss provisioning ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Encouragi ng long-term thinking by counter-cyclical prudential measures, and remuneration arrangements which better align reward and risk arising over the longer term. https://www.basel-ii-risk.com/basel-iii-guide-to-the-changes/ Development of New Basel III Standard First, The quality, consistency and transparency of the capital base will be raised. Tier 1 capital will place greater emphasis on common equity component. Tier 2 capital instruments will be harmonized. Tier 3 capital will be eliminated. Second, Enhancement of risk coverage through enhanced capital requirements for counterparty credit risk. Enhanced risk coverage will address issues that arise in connection with the use of derivatives, repos and securities financing arrangements Third, Changes to non-risk adjusted leverage ratio. This ratio will supplement the Basel II risk capital framework. Fourth, Measures to improve countercyclical capital framework. While many bank investors loved Basel III, the re were some problems encountered in Basel III. Basel III was considered to be implemented really quick even though Basel II took a decade to be put together but never got implemented properly. It was said that Basel III adopted some of the same problems faced in Basel II The risk weighing concept: The banks were told to hold more capital against the riskier assets than they do against safer assets. Basel III is considered to be backward-looking. A few drawbacks of Basel III were the following: Capital requirements in Basel III were too low; Credit ratings were depended upon the most; Banks could use internal models to measure risk; Banks could get around the rules by setting up off-balance-sheet entities like SIVs; It lacked any kind of liquidity requirements. BASEL IIIS EFFECTS ON UNITED ARAB EMIRATES Over the years, United Arab Emirates have been reporting to a BASEL I framework. Since, it is progressing well, there are doubts that there will be immediate implementation of BASEL III. However, over the past year or so, the U.A.E has needed significant capital injections and liquidity support, so the ratios will report negative effects. Hence, there is no rush to adopt to Basel III, as new standards would highlight capital and liquidity drawbacks. Currently, the U.A.Es banks are reporting elevated capital ratios ( 15% Tier I ratios, 18% CAR), but this has been boosted by public sector injections of Tier I and Tier II capital. The equity- asset ratios of 10 % has indicated how Tier I ratios might present itself under BASEL III framework, particularly if banks attempt to setback or smooth provisioning against a likely imminent decline in asset quality. Dr. Nasser Al Saidi, Executive Director of the Hawkamah- Institute for Corporate Governance said, Banking regulations must proc eed on a global basis but since the UAE banks are almost applying the same capital adequacy ratio as Basel III requirements, the new international rules would not have a direct impact on the UAE banking sector. However, due to the global recession, several banks buckled, while furthermore have botched various challenges, highlighting a elementary flaw amongst banks worldwide. Dr. Al Saidi also mentioned that the increase in capital requirement from 2% to 7% was a compulsory amendment as the increased capital would reduce the risk. If some banks still felt that the reserve wasnt enough, then they would tend to increase it out of further prudence and that would reduce the finances available to businesses, thus leading to added cost of loans. UAE banks are among the paramount capitalised in the world, and traditionally inflexible principles set by the UAE Central Bank for principal needs means that local banks already outdo norms set by the Bank for International Settlements (BIS) a s part of the Basel III accord, which has a 2019 deadline, analysts say. Analysts also feel that the U.A.Es banking regulations are already stricter than those proposed by BASEL III. U.A.Es banks are safer as compared to majority of their Western and European counterparts. At present, the Tier I and total capital requirement ratios stand at 8 percent and 12 percent respectively, which already higher than the 2019 target ratios proposed by BASEL III of 6 percent and 8 percent respectively. The BIS reported that it has developed an accord for the boosting of vital capital ratios for all banks. The least necessity for general equity, the peak form of loss absorbing capital, will be lifted from the existing 2 to 4.5 per cent after the submission of stricter adjustments, which will be ushered in by 2015. The total Tier 1 capital necessity, which includes regular equity and other qualifying financial instruments depending upon harsher grounds, will raise from 4 percent to that of 6 percen t during the existing phase. A buffer requirement of 2.5 per cent that can be strained down to the 4.5 per cent least necessity when called for. Effectively, this will elevate general equity necessities to 7 per cent. If a bank falls under the 7 per cent general equity necessities, including the cushion, allocation of income should condense atleast till the 7 per cent stage is improved. The margins above would relate to dividends and managerial reimbursement, including bonuses. These changes are supposed to reinforce the banks stability to absorb future potential losses. The transition period for banks to comply with these rules was set at 2012, however, it has now been extended to January, 2019. Since the U.A.Es banks are still adjusting to Basel IIs policies since November, 2009, it will be far too early to comment upon the consequences of these new regulation changes. Basel III rules on capital adequacy rates stipulate phased increases from 2 per cent to 3.5 per cent in 20 12, to 4.5 per cent by 2015 and to the full 7 per cent by the end of 2018. Although the U.A.E is in recession, these regulations give banks a necessary amount of time to adjust. There is faith in the U.A.Es financial system, as it has been able to cope flexibly and effectively to unforeseen shocks. Data Analysis https://www.systemiclogic.com.au/?p=1038 The above graph places emphasis on the quality of capital required. The new capital requirement will emerge in a period of five years, and over this period the minimum capital ratio will remain at 8%- However, its composition may change. Ordinary shares which are the highest quality capital are seen to move from 2% under Basel II to 4% under Basel III. As a result, the relevance of Tier 2/3 which is the lower quality capital will reduce to a quarter of the total required. Apart from the minimum capital requirement, institutions are expected to hold a conservation buffer also in common equity of 2.5%, which will act as a measure of relief in times of stress. https://www.allvoices.com/contributed-news/7323914-basel-3-has-arrived-finally-for-banks/content/63411911-basel-iii After the release of Basel II, the capital requirement was at 2%. With the arrival of Basel III updates the value has increased to 4.5%. (I.e. an increase of 2.5%). Basel IIIs stated aims are to improve the banking sectors ability to Absorb shocks Improve risk management Strengthen banks transparency To achieve this it laid down two areas of regulation, which are: micro prudential this includes dealing with the flexibility of individual banks and macro prudential which includes dealing with the strength of the banking sector as a whole. According to the Basel III reforms, one of the methods to bring about the change from procyclical lending to countercyclical lending, include increasing capital requirements and adding more capital buffers to deal with times of stress, rising from 2.5% to 7%. The Tier 1 capital requirement, that covers various qualifying financial resources which are based on rigid criteria, and common equity, will increase to 6% from its current value of 4% during the same time. Basel 3 summary has given the date from which it has to be put into practice by various member nations. The date turns out to be 1st January 2013. It is said that member countries have to convert the Basel III updates into national financial regulations before this date. Basel 3 Summary also affects the Risk weighted assets or RWAs and the date of implementation is the same. The first section is 3.5% common equity for every RWA. The next one is to have 4.5% Tier 1 capital for every RWA, amounting to the total of 8% capital for every RWA. Basel III also brings forward the minimum common equity requirement that to be followed from 1st January 2013 till 1st January 2015. The change in the minimum common equity requirement from 2% to 3.5% is effective from 1st January 2013. The T ier 1 capital requirements have also risen to 5.5% from 4%, which is a slight change. The banks should aim to reach 4% minimum common equity plus 5.5% of Tier 1 capital by 1st January 2014. From the above it can be noted that Basel III summary has made 1st January 2015 into an important date, as we can see that by that time the banks will have common equity raised to 4.5% and the Tier 1 requirements raised to 6%.

Lord Of The Flies Character Analysis Essay - 814 Words

When people are born, they are innately evil, having only the primal instincts to survive. However, society attempts to lock those instincts away by casting a burden called rules upon them. In the allegorical text, Lord of the Flies, William Golding depicts a group of boys, stranded on a tropical island, free of civilization. Here he paints an image of what humans really are without the burdens of society. In Golding’s psychological allegory The Lord of the Flies, Jack embodies the ID, someone who acts based on his/her own basic wants and needs, for the sake of establishing his theme: Humans are, no matter the circumstance, evil, and man tries make humans ideal and good through the making of rules and laws. From beginning to end, Golding†¦show more content†¦In the later stages of the novel, when Jack and Ralph argue, Ralph tries to assert the power and authority that the conch, the symbol of law and order holds, in order to speak, however, Jack states, â€Å"You havent got it with you, â€Å" said Jack, sneering. â€Å"You left it behind. See, clever? And the conch doesn’t count on this end if the island—† (Golding 150). Jack’s disregard for civilization can be shown when Ralph attempts to speak by mentioning the conch, the symbol for law and order, and sneers. The fact that he sneers represents how savage Jack has truly become. When Jack is first introduced he encouraged rules:â€Å"We’ll have rules!† he cried excitedly. (Golding 33). He makes fun of the conch the one thing all of the boys on the island agreed, subconsciously, to be the only remnant of society and thus is the reason they listened to Ralph at all: â€Å" Him with th e shell. Ralph! Ralph! Let him be chief with the trumpet-thing.† (Golding 22). In addition to Jack’s complete negligence of the conch, he even promotes and praises savagery. By stating that the conch only counts on one part of the island and not on another insinuates the idea that whatever happens on that side of the island is not governed by law and order but by instinct, lust to kill, and primitive desires. Here Jack divulges in his voracity and his wants, explaining the reason Jack is the ID: he acts based on his mostShow MoreRelatedLord Of The Flies Character Analysis Essay1094 Words   |  5 Pagesbut, in the novel Lord of the Flies by William Golding the main character Ralph and the other boys were shot down in a plane crash. Before the plane crash these boys never knew each other. Through the novel they were able to grow close bounds until the effects of having no civilization ended in unfortunate events for some. Ending in deaths of important characters leading to a rescue that many of the boys had given up hope on. Ralph develops from a rational and civilized character to someone who comeRead MoreLord Of The Flies Character Analysis Essay750 Words   |  3 Pagesother. Among them. A wild uncivilized gang of boys establishes a great example of anarchy with none to tell them otherwise. They are all alone so no one to turn to in times of violence or disagreeance possibly leading to murder and crime. In Lord of the Flies, Golding represents Simon as the peace and equality in our society he is the one in the book who resorts to compromise rather than conflict such as the way he died with the group completely malling him thus killing him. Simon is the one and onlyRead MoreLord Of The Flies Character Analysis Essay718 Words   |  3 PagesHave you ever thought what type of hardships children would deal with when stranded on an island? This question is answered in the story called Lord of the Flies, written by William Golding. The character fo cused on will be a boy named Ralph, a blond boy who is built like a boxer. He, Ralph, is the main character, is perceived as the protagonist, and is seen as the leader. Ralph lead the other children with rudimentary leadership, his obsession with fires, he blew the conch that started everythingRead MoreLord Of The Flies Character Analysis Essay1414 Words   |  6 Pages Analysis of Societal Constructs Displayed in LORD â€Å"We hold these truths to be sacred and undeniable; that all men are created equal and independent, that from that equal creation they derive rights inherent and inalienable, among which are the preservation of life, and liberty, and the pursuit of happiness†. This famous phrase that derives from the Declaration of Independence brought forth notion that of all of humanity is to be acknowledged as equal and are guaranteed rights of life which are toRead MoreLord Of The Flies Character Analysis Essay944 Words   |  4 PagesHow does Ralph stand out amongst the other boys? Lord of the Flies ,written by William Golding and created during the Cold War, however it based during World War II. Ralph, a character in the novel who demonstrates an obvious sense of common sense amongst the other boys and due to his perseverance through all his adversities made him stronger amongst the other boys. Ralph believes in the attempt to keep sense and order, accepts the role of leader , and thinks that maintaining the fire remains essentialRead MoreLord Of The Flies Character Analysis Essay772 Words   |  4 PagesLord of the Flies is a novel written in 1954 by William Golding. A plane carrying a group of British citizens trying to escape the nuclear war gets shot down and lands on a deserted tropical island. The only survivors are children ranging from the age of six to twelve-year-olds. The younger children are nick named â€Å"littluns† and the older children are nick named â€Å"biguns†. At first, they celebrate their freedom from the war but then they begin to realize there arent any adults to supervise them,Read MoreLord Of The Flies Character Analysis Essay1784 Words   |  8 Pages Sometimes, looks can be deceiving. Nobody can predict the success of a person simply according to his/her appearance. In William Golding’s Lord of the Flies, the consequences of making the incorrect decision based on one’s looks is revealed. In this nov el, a group of young British boys are stranded on an isolated island with no adults as a result of a plane crash. They must remain civilized and create rules themselves to ensure that order is not lost. To do so, they elect a fair-haired and attractiveRead MoreLord of the Flies: Character Analysis of Ralph Essay613 Words   |  3 PagesImagine a world without order. A world with no leadershipÂâ€"no rationality whatsoever. Take Ralphs character away from the equation and William Goldings Lord of the Flies would be just thatÂâ€"chaos. Being the protagonist of the novel, Ralph is the major representative of civilization, order, and productive leadership. If it werent for Ralphs coordination, determination, and logical thinking, the boys would never be rescued, and would eventually die. As the novel progresses, Ralphs self-confidenceRead MoreLord Of The Flies Simon Character Analysis Essay852 Words   |  4 PagesLord of the Flies: William Golding In Lord of the Flies, Simon shows to be an important role in the story as he uncovers the mystery of the beastie. He is seen to be shy and to himself but soon shows his full brain capability and what he can offer to the group but it goes unnoticed. His personality is unique and shows much potential, as does mine. Both me and Simon are independent, sensitive, and introverted as this presents an idealistic nature. Simon is one to resist the influence of those aroundRead MorePiggy Character Analysis - Lord of the Flies Essay985 Words   |  4 PagesIn every piece of literature there is always one character that stands out to me. Coincidentally, the characters I usually choose to admire are the weak, unpopular, failure types. In the book â€Å"Lord of the Flies† by William Golding the character that stood out to me most was Piggy. He was the boy whose real name was never mentioned, but his real name wouldn’t be as symbolic as the nickname he had throughout the book. Throughout the earlier chapters I pictured Piggy as the run of the mill loser that

Chapter 8 Outline 10Th Grade Essay Research free essay sample

Paper Biology Chapter 8 Outline 8:1 Ten Chromosome: one of the chromosomes that determine a sex ; sex chromosomes Y Chromosome: one of the chromosomes that determine sex, Sexual activity chromosome Sexual activity chromosomes: because the two chromosomes differ between the sexes, we call them sex chromosomes. Autosomes: chromosomes non related to an being # 8217 ; s sex. 8:2 Sex-linked feature: trait whose cistrons are carried on the X chromosome. 8.4 Nondisjunction: failure of homologs to segregate during miosis. Chromosome theory of heredity: the theory that cistrons are located on chromosomes. 8:5 Gene linkage: the cistrons that occur on the same chromosome ( linked ) 8:6 Crossing-over: exchange of sections of chromosomal stuff between two strands of a four ; occurs during prophase of miosis. Recombination gametes: gametes with a set of linked cistrons different than that found in the parent. Familial map: the location of cistrons on a chromosome. 8:7 Continuous fluctuation: the presence of many multiple length progeny. Multiple cistrons: three or more different allelomorphs commanding a trait. We will write a custom essay sample on Chapter 8 Outline 10Th Grade Essay Research or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 8:8 Modifier cistrons: cistrons that affect the look of other allelomorphs. Familial guidance: type of guidance in which parents can be advised of their opportunities of holding offspring with a familial disease. 8:9 Deadly cistron: an allelomorph that causes decease. 8:11 Ultrasonography: a technique used to find the place and anatomy of a foetus. Fetoscopy: allows direct observation of the foetus and environing tissues. Endoscope: device that allows a foetus to be viewed while it is still in the womb.

Procter Gamble Europe Vizir Launch

Should they launch now or wait? For proctor Gamble, there are various challenges that face its launching plan. The company should launch its product now. Firstly, the time it has spent conducting market survey is enough to convince the marketers about the projected returns from the liquid product.Advertising We will write a custom assessment sample on Procter Gamble Europe: Vizir Launch specifically for you for only $16.05 $11/page Learn More Despite the competition from Henkel and the projected internal competition from Aerial, the introduction of the liquid detergent will set a new track for this company (Harvard Business School 1989). Waiting for some time will lead to the release of Henkel’s new product and this may affect the response from the customers. Timeliness in the release of new products is very important. Although it gives the competitors something to learn about the product, it still creates an opportunity to get popular and gain consumer loyalty. By being vibrant in the launching campaign, the company will be in a better position to introduce a new wave of culture, in the use of liquid detergents. This will lead to great market command in liquid detergents since Henkel might be on the verge of releasing a liquid detergent that might make it hard for Vizir product to succeed in the market. There should be no more wasting of time in the release of the product as it may allow for other competitor brands to be launched and hence affect the popularity of Vizir upon its release. Should they launch the brand as euro brand? There is usually a connection of consumers with local brands; they are usually influenced to purchase local products as a form of identity creation. In the case of Vizir, however, it should be introduced as a foreign brand and not as a European brand. The main reason for this is the washing culture in Europe and the differences that arise when compared to American culture. Introducing the brand as a European one would require to be changed wholly so as to make it compliant with European standards. The brand should remain as a foreign product in order to make it easier to expand the sales to other countries. Developing a European brand would require changes in the marketing strategies since the customers’’ preferences have to be re-evaluated and re-strategized. Consumer preferences have to be altered and before the brand can penetrate the local brand under local registration, it would take time and more money (Harvard Business School 1989). For this reason, the brand should remain as a foreign brand but with characteristics that favor the European markets. This might reduce the limiting factor associated with marketing and expanding the brand to other regions.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More What should their structure be? The organizational struc ture should not be different from the already existing one. This will make it easier to manage the new product. Being a company that is affiliated to the main brands, Procter Gamble should elect a manager in every country to foresee the developments and acceptance of the new brand in the new market. There should be two managers rather than three in order to reduce the expenses incurred at the executive level. The laundry and cleaning department as well as the personal care products departments should be headed by a single manager; this reduces the expenses and increases the possible returns on investment. The sales team and product development managers should be supplied with more subordinate employees to help in popularizing the product upon its launch. With proper follow up from the executives, it would be easier to control the employees in sales and marketing departments in order to make the brand popular and establish its mark in the European market. Proper definition of roles and responsibilities is one of the major concepts that will influence great returns upon investment. With a slight reduction in executive management and an increasing number of junior employees, the company has the manpower it needs to influence popularity of the product. References Harvard Business School 1989, Procter Gamble Europe: Vizir launch, Harvard University Press, Cambridge. This assessment on Procter Gamble Europe: Vizir Launch was written and submitted by user Shang-Chi to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.