Course title

Challenges and opportunities after the Basel III Accord. The national discretions around the world.

Objectives

This course has been designed to provide with the knowledge and skills needed to understand:

1. The Basel III regulatory differences around the world.

2. The difficult national discretions and the impact on profitability.

3. Regulatory arbitrage after Basel III.

Target Audience

This course is intended for microprudential supervisors.

Course Synopsis

Introduction

Overview of the Basel III Accord.

Introduction to the Basel III Amendments.

The important differences in the implementation of the Basel III Accord.

The important changes after Basel iii

A. The new Basel III Principles for risk management and corporate governance.

The major challenges for the Board of Directors.

The regulatory differences in the definition of the fit and proper requirements.

B. The new Quality of Capital.

The Common Equity Tier 1 major challenge. Regulatory differences and national discretions.

Investments held by banks in capital instruments of other banks and financial and insurance entities. Regulatory differences and national discretions.

The corresponding deduction approach and the changes in the business model.

Double Gearing and Basel III.

C. The Risk Weighted Assets. Regulatory differences and national discretions.

D. The Capital Ratio. Regulatory differences and national discretions.

E. The new Global Liquidity Standards and the maturity transformation consequences. Regulatory differences and national discretions.

F. The Capital Conservation Buffer, the Leverage Ratio, the Countercyclical Capital Buffer, the challenges for Systemically Important Financial Institutions (SIFIs). Regulatory differences and national discretions.

G. Differences in Risk Modelling, Stress Testing and Scenario Analysis.

Why the new capital rules have a substantial impact on profitability. The Cost of Equity and the need for Common Equity Tier 1 capital and liquid assets.

Banks with insurance subsidiaries.

Asset management, investment banking, retail banking: The different impact on business from the interaction of Solvency II, Basel III, the Financial Conglomerates Directive (and its amendments), the decisions for Systemically Important Financial Institutions (SIFIs) and Global Systemically Important Financial Institutions (G-SIFIs).

Basel iii and the Dodd Frank Act in the USA.

Challenges and opportunities for banks in the EEA.

Regulatory differences and regulatory arbitrage.

National discretions and the acceptable range of supervisory practices.

Making decisions about the cost of risk management and compliance in a country.

Closing remarks.

We can tailor the course to meet specific requirements.


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