The global financial crisis highlighted that the quantity and quality of bank capital was inadequate. The crisis also underlined the need for regulators to address not simply capital adequacy, but also liquidity and leverage. This course focuses on the broad Basel regulatory framework introduced in the years following the crisis.
- Recognize the components of the capital adequacy ratio (CAR) and how their values are determined and identify the permitted approaches for regulatory capital calculations for Pillar 1 risks
- Recognize the importance of capital for loss-absorbency purposes and the various components of regulatory capital Identify the key Basel III requirements related to capital adequacy (Pillar 1), including the permitted approaches to calculating regulatory capital and the minimum capital ratios
- Recognize the need for the Basel III framework to include requirements related to liquidity and leverage Calculate a bank’s Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), and leverage ratio
- Recognize the purpose of the Pillar 2 framework and the four key principles outlined by the Basel Committee on Banking Supervision (BCBS) Identify the steps involved in the ICAAP process. This tutorial describes the Pillar 2 regime in detail.
- Identify how the Pillar 3 disclosure regime has evolved through the years and the challenges that banks face in meeting these requirements recognize the key Pillar 3 disclosure obligations and the templates/tables that banks must use when making such disclosures. This tutorial describes the Pillar 3 regime in detail.
Who is the course for?
This course aims to provide all staff at banks and other financial institutions with an in-depth understanding of the Basel III regulatory framework.
- The evolution of regulatory capital requirements from (Basel I) to the “three pillars” approach introduced by Basel II and retained by Basel III
- The major changes to the capital adequacy regime under Basel III
- The various permitted approaches for regulatory capital calculations for Pillar 1 risks
- The components and methodology of the Basel III liquidity ratios (LCR and NSFR) and leverage ratio
- The requirements for banks and regulators under Pillar 2, including ICAAP and SREP
- The disclosure requirements under Pillar 3 and the associated reporting challenges for banks
*The e-learning program is non-refundable once an account is created.
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