The Basel III reforms aimed to strengthen bank capital requirements and increase capital quality. It introduced stricter definitions of capital with Common Equity Tier 1 (CET1) being the highest quality capital absorbing losses immediately. Additional Tier 1 (AT1) and Tier 2 capital provide loss absorption on a going and gone concern basis respectively. Total available regulatory capital is the sum of Tier 1 and Tier 2 capital. Basel III also harmonized regulatory deductions and established minimum capital ratios to improve transparency and reduce inconsistencies across jurisdictions.
A bank�s balance sheet information is shown below (in $000). On Bala.pdfalfaknr
A banks balance sheet information is shown below (in $000). On Balance Sheet Items Face
Value Cash $121,600 Short-term government securities (<92 days.) 5,400 Long-term
government securities (>92 days) 414,400 Federal Reserve stock 9,800 Repos secured by federal
agencies 169,000 Claims on U.S. depository institutions 937,900 Loans to foreign banks, OECD
CRC rated 2 1,640,000 General obligations municipals 170,000 Claims on or guaranteed by
federal agencies 26,500 Municipal revenue bonds 102,900 Residential mortgages, category 1,
loan-to-value ratio 75% 5,000,000 Commercial loans 4,667,669 Loans to sovereigns, OECD
CRC rated 3. 11,600 Premises and equipment 455,000 Conversion Face Off Balance Sheet
Items: Factor Value U.S. Government Counterparty: Loan commitments: < 1 year 20% $300 1-5
year 50% 1,140 Standby letters of credit: Performance-related 50% 200 Direct-credit substitute
100% 100 U.S. Depository Institutions Counterparty: Loan commitments: < 1 year. 20% 100 > 1
year 50% 3,100 Standby letters of credit: Performance-related 50% 200 Direct-credit substitute
100% 56,400 Commercial letters of credit: 20% 400 State and Local Government Counterparty:
(revenue municipals) Loan commitments: >1 year 50% 100 2 Copyright 2020 McGraw-Hill
Education. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw-Hill Education. Standby letters of credit: Performance-related 50% 135,400
Corporate Customer Counterparty: Loan commitments: < 1 year 20% 3,212,300 >1 year 50%
3,046,278 Standby letters of credit: Performance-related 50% 101,543 Direct-credit substitute
100% 490,900 Commercial letters of credit: 20% 78,978 Sovereign Counterparty: Loan
commitments, OECD CRC rated 1: < 1 year 20% 110,500 >1 year 50% 1,225,400 Sovereign
Counterparty: Loan commitments, OECD CRC rated 2: < 1 year 20% 85,000 >1 year 50%
115,500 Sovereign Counterparty: Loan commitments, OECD CRC rated 7: >1 year. 50% 30,000
Interest rate market contracts: (current exposure assumed to be zero.) < 1 year (notional amount)
0% 2,000 > 1-5 year (notional amount) 0.5% 5,000 1. What is the bank's risk-adjusted asset base
under Basel III? Find the appropriate risk-weight for the off-balance sheet items using Table 21-
7 (for the risk weights, you use Table 21-7 for BOTH on- and off-balance sheet items). Hint: For
OBS market contracts, the appropriate risk-weight is 1 or 100%. 2. To be adequately capitalized,
what are the bank's CET1, Tier I, and total risk-based capital requirements under Basel III? Hint:
Refer to Table 21-3. 3. Using the leverage ratio requirement, what is the minimum regulatory
capital required to keep the bank in the adequately-capitalized zone? Hint: Refer to Table 21-3. 3
. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 4.
Disregarding the capital conservation buffer, what is the bank's capital adequacy level (under
Basel III) if the par value of its equity is $215,000, surplus value of e.
“Basel III is more about improving the risk management systems in the Banks than just Improved Quality and enhanced Quantity of capital”. Please discuss the challenges to the Indian Banks by March,2017
A bank�s balance sheet information is shown below (in $000). On Bala.pdfalfaknr
A banks balance sheet information is shown below (in $000). On Balance Sheet Items Face
Value Cash $121,600 Short-term government securities (<92 days.) 5,400 Long-term
government securities (>92 days) 414,400 Federal Reserve stock 9,800 Repos secured by federal
agencies 169,000 Claims on U.S. depository institutions 937,900 Loans to foreign banks, OECD
CRC rated 2 1,640,000 General obligations municipals 170,000 Claims on or guaranteed by
federal agencies 26,500 Municipal revenue bonds 102,900 Residential mortgages, category 1,
loan-to-value ratio 75% 5,000,000 Commercial loans 4,667,669 Loans to sovereigns, OECD
CRC rated 3. 11,600 Premises and equipment 455,000 Conversion Face Off Balance Sheet
Items: Factor Value U.S. Government Counterparty: Loan commitments: < 1 year 20% $300 1-5
year 50% 1,140 Standby letters of credit: Performance-related 50% 200 Direct-credit substitute
100% 100 U.S. Depository Institutions Counterparty: Loan commitments: < 1 year. 20% 100 > 1
year 50% 3,100 Standby letters of credit: Performance-related 50% 200 Direct-credit substitute
100% 56,400 Commercial letters of credit: 20% 400 State and Local Government Counterparty:
(revenue municipals) Loan commitments: >1 year 50% 100 2 Copyright 2020 McGraw-Hill
Education. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw-Hill Education. Standby letters of credit: Performance-related 50% 135,400
Corporate Customer Counterparty: Loan commitments: < 1 year 20% 3,212,300 >1 year 50%
3,046,278 Standby letters of credit: Performance-related 50% 101,543 Direct-credit substitute
100% 490,900 Commercial letters of credit: 20% 78,978 Sovereign Counterparty: Loan
commitments, OECD CRC rated 1: < 1 year 20% 110,500 >1 year 50% 1,225,400 Sovereign
Counterparty: Loan commitments, OECD CRC rated 2: < 1 year 20% 85,000 >1 year 50%
115,500 Sovereign Counterparty: Loan commitments, OECD CRC rated 7: >1 year. 50% 30,000
Interest rate market contracts: (current exposure assumed to be zero.) < 1 year (notional amount)
0% 2,000 > 1-5 year (notional amount) 0.5% 5,000 1. What is the bank's risk-adjusted asset base
under Basel III? Find the appropriate risk-weight for the off-balance sheet items using Table 21-
7 (for the risk weights, you use Table 21-7 for BOTH on- and off-balance sheet items). Hint: For
OBS market contracts, the appropriate risk-weight is 1 or 100%. 2. To be adequately capitalized,
what are the bank's CET1, Tier I, and total risk-based capital requirements under Basel III? Hint:
Refer to Table 21-3. 3. Using the leverage ratio requirement, what is the minimum regulatory
capital required to keep the bank in the adequately-capitalized zone? Hint: Refer to Table 21-3. 3
. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 4.
Disregarding the capital conservation buffer, what is the bank's capital adequacy level (under
Basel III) if the par value of its equity is $215,000, surplus value of e.
“Basel III is more about improving the risk management systems in the Banks than just Improved Quality and enhanced Quantity of capital”. Please discuss the challenges to the Indian Banks by March,2017
Recognising intra-group loans following the OECD’s FTTP guidanceChristos Theophilou
Christos Theophilou and Costas Savva of Taxatelier consider how the OECD’s guidance on financial transactions and transfer pricing (FTTP) can be interpreted in consideration of intra-group loans. The article appears in International Tax Review, published by Euromoney PLC.
The Challenges and Opportunities of IFRSNeha Sharma
The Ministry of Corporate Affairs (MCA) has drawn up a revised roadmap for companies for implementation of the Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS) for companies other than banking companies, insurance companies and NBFCs.
Recognising intra-group loans following the OECD’s FTTP guidanceChristos Theophilou
Christos Theophilou and Costas Savva of Taxatelier consider how the OECD’s guidance on financial transactions and transfer pricing (FTTP) can be interpreted in consideration of intra-group loans. The article appears in International Tax Review, published by Euromoney PLC.
The Challenges and Opportunities of IFRSNeha Sharma
The Ministry of Corporate Affairs (MCA) has drawn up a revised roadmap for companies for implementation of the Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS) for companies other than banking companies, insurance companies and NBFCs.
Literature Review Basics and Understanding Reference Management.pptxDr Ramhari Poudyal
Three-day training on academic research focuses on analytical tools at United Technical College, supported by the University Grant Commission, Nepal. 24-26 May 2024
TOP 10 B TECH COLLEGES IN JAIPUR 2024.pptxnikitacareer3
Looking for the best engineering colleges in Jaipur for 2024?
Check out our list of the top 10 B.Tech colleges to help you make the right choice for your future career!
1) MNIT
2) MANIPAL UNIV
3) LNMIIT
4) NIMS UNIV
5) JECRC
6) VIVEKANANDA GLOBAL UNIV
7) BIT JAIPUR
8) APEX UNIV
9) AMITY UNIV.
10) JNU
TO KNOW MORE ABOUT COLLEGES, FEES AND PLACEMENT, WATCH THE FULL VIDEO GIVEN BELOW ON "TOP 10 B TECH COLLEGES IN JAIPUR"
https://www.youtube.com/watch?v=vSNje0MBh7g
VISIT CAREER MANTRA PORTAL TO KNOW MORE ABOUT COLLEGES/UNIVERSITITES in Jaipur:
https://careermantra.net/colleges/3378/Jaipur/b-tech
Get all the information you need to plan your next steps in your medical career with Career Mantra!
https://careermantra.net/
We have compiled the most important slides from each speaker's presentation. This year’s compilation, available for free, captures the key insights and contributions shared during the DfMAy 2024 conference.
NO1 Uk best vashikaran specialist in delhi vashikaran baba near me online vas...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
Online aptitude test management system project report.pdfKamal Acharya
The purpose of on-line aptitude test system is to take online test in an efficient manner and no time wasting for checking the paper. The main objective of on-line aptitude test system is to efficiently evaluate the candidate thoroughly through a fully automated system that not only saves lot of time but also gives fast results. For students they give papers according to their convenience and time and there is no need of using extra thing like paper, pen etc. This can be used in educational institutions as well as in corporate world. Can be used anywhere any time as it is a web based application (user Location doesn’t matter). No restriction that examiner has to be present when the candidate takes the test.
Every time when lecturers/professors need to conduct examinations they have to sit down think about the questions and then create a whole new set of questions for each and every exam. In some cases the professor may want to give an open book online exam that is the student can take the exam any time anywhere, but the student might have to answer the questions in a limited time period. The professor may want to change the sequence of questions for every student. The problem that a student has is whenever a date for the exam is declared the student has to take it and there is no way he can take it at some other time. This project will create an interface for the examiner to create and store questions in a repository. It will also create an interface for the student to take examinations at his convenience and the questions and/or exams may be timed. Thereby creating an application which can be used by examiners and examinee’s simultaneously.
Examination System is very useful for Teachers/Professors. As in the teaching profession, you are responsible for writing question papers. In the conventional method, you write the question paper on paper, keep question papers separate from answers and all this information you have to keep in a locker to avoid unauthorized access. Using the Examination System you can create a question paper and everything will be written to a single exam file in encrypted format. You can set the General and Administrator password to avoid unauthorized access to your question paper. Every time you start the examination, the program shuffles all the questions and selects them randomly from the database, which reduces the chances of memorizing the questions.
Online aptitude test management system project report.pdf
defcap_b3.pdf
1. 1/2
Definition of capital in Basel III – Executive Summary
The 2007–09 Great Financial Crisis (GFC) revealed several weaknesses in the capital bases of internationally
active banks: definitions of capital varied widely between jurisdictions, regulatory adjustments were generally
not applied to the appropriate level of capital and disclosures were either deficient or non-comparable. These
factors contributed to the lack of public confidence in capital ratios during the GFC. To address these
weaknesses, the Basel Committee on Banking Supervision (BCBS) published the Basel III reforms in December
2010 with the aim of strengthening the quality of banks’ capital bases and increasing the required level of
regulatory capital. In addition, the BCBS instituted more stringent disclosure requirements.
Regulatory capital under Basel III focuses on high-quality capital, predominantly in the form of shares
and retained earnings that can absorb losses. The new features include specific classification criteria for the
components of regulatory capital. Basel III also introduced an explicit going- and gone-concern framework by
clarifying the roles of Tier 1 capital (going concern) and Tier 2 capital (gone concern), as well as an explicit
requirement that all capital instruments must be able to fully absorb losses at the so-called point of non-
viability (PoNV) before taxpayers are exposed to loss. In addition, regulatory deductions from capital and
prudential filters have been harmonised internationally and are mostly applied at the level of common equity.
Combined with enhanced disclosure requirements, aimed at improving the transparency of banks’ capital bases
and in this way improving market discipline, the revised definition aimed to reduce inconsistencies in its
implementation across jurisdictions.
Components of regulatory capital
Common Equity Tier 1 capital (CET1) is the highest quality of regulatory capital, as it absorbs losses immediately
when they occur. Additional Tier 1 capital (AT1) also provides loss absorption on a going-concern basis,
although AT1 instruments do not meet all the criteria for CET1. For example, some debt instruments, such as
perpetual contingent convertible capital instruments, may be included in AT1 but not in CET1. In contrast, Tier
2 capital is gone-concern capital. That is, when a bank fails, Tier 2 instruments must absorb losses before
depositors and general creditors do. The criteria for Tier 2 inclusion are less strict than for AT1, allowing
instruments with a maturity date to be eligible for Tier 2, while only perpetual instruments are eligible for AT1.
Total available regulatory capital is the sum of these two elements – Tier 1 capital, comprising CET1
and AT1, and Tier 2 capital. Each of the categories has a specific set of criteria that capital instruments are
required to meet before their inclusion in the respective category. Banks are required to maintain specified
minimum levels of CET1, Tier 1 and total capital, with each level set as a percentage of risk-weighted assets.
Tier 1
(going concern)
Common
Equity Tier 1
(CET1)
Sum of common shares (equivalent for non-joint
stock companies*
) and stock surplus, retained
earnings, other comprehensive income, qualifying
minority interest and regulatory adjustments
CET1 >4.5%
Additional
Tier 1 (AT1)
Sum of capital instruments meeting the criteria for
AT1 and related surplus, additional qualifying
minority interest and regulatory adjustments
CET1 + AT1 >6%
Tier 2
(gone concern)
Sum of capital instruments meeting the criteria for
Tier 2 and related surplus, additional qualifying
minority interest, qualifying loan loss provisions and
regulatory adjustments
CET1 + AT1 + Tier 2 >8%
*
The standard requires instruments issued by non-joint stock companies to meet a set of criteria to be deemed equivalent to common
shares and included in CET1.
2. 2/2
The PoNV condition requires all AT1 and Tier 2 instruments to be capable of being converted into
common equity or written off. The trigger for the conversion/write-off is the earlier of (i) a decision of the
relevant authority that the conversion/write-off is necessary, given that the bank is assessed to be non-viable;
and (ii) a decision to inject public funds to prevent the bank’s failure. This may happen based on either the
authority’s statutory powers or the contractual features of the capital instruments.
Minority (or non-controlling) interest
Minority interest, or non-controlling interest, arises from capital instruments issued to third parties by a fully
consolidated subsidiary of a bank and can be located in any of the three components of regulatory capital:
CET1, AT1 and Tier 2. Minority interest may receive recognition in the consolidated bank when it has the same
loss-absorbing capacity as regulatory capital, that is, the instruments would, if issued by the parent bank, meet
all of the criteria for classification as regulatory capital. In addition, the minority interest must not be funded,
either directly or indirectly, by the parent bank and must be issued by a subsidiary that is itself a bank.
A bank subsidiary must maintain its minimum regulatory capital requirement at all times, and that
capital must be available to support the consolidated group. As surplus capital in the subsidiary, that is, more
than the statutory minimum requirement, could be repaid to the holders of the non-controlling interest, Basel
III limits the recognition of minority interest to the amounts being used to cover statutory minimum capital
requirements and excludes surplus capital of the subsidiary that is attributable to a non-controlling interest.
Regulatory adjustments
Basel III provides for a comprehensive list of regulatory adjustments and deductions from regulatory capital.
These deductions typically address the high degree of uncertainty that these items have a positive realisable
value in periods of stress and are mostly applied to CET1. Important deductions are goodwill and other
intangible assets, deferred tax assets and investments in other financial entities.
For calculating regulatory capital for banks with investments in other financial institutions (banks, insurance
and other financial entities) there should be no double-counting of capital. Hence, the underlying principle for
the regulatory definition is “consolidation or deduction”. The deduction should be applied by the investing
bank to the same component of capital as the component in which the issuing bank receives recognition. This
is referred to as the corresponding deduction approach.
New thresholds are applied to certain of the deductions under Basel III. Banks receive limited recognition for
their significant investments in the common shares of unconsolidated financial institutions, mortgage servicing
rights and deferred tax assets that arise from temporary differences. Each item is individually capped at 10%
of the bank’s common equity after the application of certain regulatory adjustments, and the aggregate is
limited to 15% of the bank’s CET1. Non-significant investments in unconsolidated financial institutions
(that is, where the bank owns less than 10% of the common shares) are only deducted to the extent that all
such exposures in aggregate exceed 10% of the bank’s common equity.
This Executive Summary and related tutorials are also available in FSI Connect, the online learning tool of the
Bank for International Settlements.