Basel III: Beyond Compliance: An Analysis of the Current Compliance Level of the Capital and Liquidity Requirements of Basel III in the European Banking Sector, and an Assessment on How European Banks Can Accommodate

Abstrakt

The financial crisis of 2007-2008 proved that the banking sector was not sufficiently capitalized. Consequently, the Basel Committee of Banking Supervision developed Basel III that introduces several capital and liquidity requirements with the purpose of strengthening the stability of the banking sector. This thesis analyzes the current compliance levels of the capital and liquidity requirements of Basel III for the European banking sector, hereunder the risk-based capital requirements, the leverage ratio, the liquidity coverage ratio, and the net stable funding ratio. Moreover, the thesis provides recommendations for European banks on how to accommodate the capital and liquidity requirements.