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Basel III Proposal To Strengthen The International Banking Industry

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Introduction

Basel III Proposal To Strengthen The international banking industry has long recognised its inter-relationship with each other, even though it is split between different jurisdictions, distance and the economic system. Indeed, their supposed effect on the economic prosperity of the global economic system is embedded in their sensitivity and fragility. Yet, in general, the role of the banking sector in the economy of a country or even in the world determines the basis for any financial activity within each country and between parties across the world. The Basel III Consultative Paper lays out the Basel Committee’s proposal to strengthen global capital and liquidity regulations with a view to promoting a more resilient banking system. The aim of the Basel Committee policy package is to strengthen the ability of the banking system to with stand shocks from financial and economic stress, whatever the cause, this eliminates the risk of spillovers from the finance sector to the real economy (Basel Committee on Banking Supervision, 2009).

            This paper provides a critical review of the proposals and ultimately determines their feasibility, practicality and enforcement among the banking industry around the world. The repeated and continuing onslaught of economic stressors starting from the past decade has left the banking industry more fragile. The Basel Committee on Banking Supervision has long recognized its role in providing guidance not only to banks but also to regulators to ensure that the banking system remains not only resilient in the face of economic slowdown or down turn but also to be more prudent in their fiscal management. The viability of the Basel Committee’s previous recommendations and proposal was regarded as the cure for the ailing global banking industry however, Basel III’s round of proposal are too complex (Allen, Chan, Milne, & Thomas, 2010)

Basel III Proposal To Strengthen The International Banking Industry

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