Introduction of Basel III: Opportunities and Challenges

Abstract

Basel III is an opportunity as well as a challenge for the banks. It was developed from the existing Basel II framework, and the most significant differences for banks are the introduction of liquidity and leverage ratios, and enhanced minimum capital requirements. An effective implementation of Basel III need to demonstrate to regulators, customers, and shareholders that the bank are recovering well from the global banking crisis of 2008 and provide a solid foundation for the next developments in the banking sector. The complexity and demands of Basel III and the commercial demands of the banking world will require a flexible Basel III management solution that delivers speed, accuracy, and performance to deliver competitive advantage. And those banks that implement the optimal solution will not only have an ideal platform for delivering Basel III, they will also have a solid platform for their future commercial development. Although implementing Basel III will only be an evolutionary step for many organizations, the impact of Basel III on banks and the banking sector should not be underestimated, because it will drive significant challenges that need to be understood and addressed.