Just as 2010 approached its last few months, the Bank for International Settlements (BIS) decided that it was about time that it published its latest international regulatory framework for banks: BASEL III. According to BIS’s website, BASEL III is a comprehensive set of reform measures which are deemed necessary by the Basel Committee on Banking Supervision.
In addition to enforcing the regulation, supervision and risk management of the banking sector, BASEL III was created to:
In addition to the same rules of BASEL II, BASEL III comes with a few new rules –
Any bank which fails to meet the requirements set by the BASEL III framework will be banned from paying dividends to shareholders until it produces an accurate balance sheet. Thus, banks with professionals and officers with Basel II knowledge and experience need to get their staff to start studying the differences between BASEL III and its predecessors. This way, banks can save themselves from being punished by the BIS.