Examples of Basel III in a sentence
Basel III provides for a substantial strengthening of existing prudential rules, including new requirements intended to reinforce capital standards (with heightened requirements for global systemically important banks) and to establish a leverage ratio "backstop" for financial institutions and certain minimum liquidity standards (referred to as the Liquidity Coverage Ratio ("LCR") and the Net Stable Funding Ratio ("NSFR")).
The Basel Committee on Banking Supervision ("BCBS") has approved significant changes to the Basel regulatory capital and liquidity framework (such changes being commonly referred to as "Basel III") and has proposed certain revisions to the securitisation framework.
As implementation of any changes to the Basel framework (including those made via Basel III) requires legislation in each jurisdiction, the final rules and the timetable for its implementation in each jurisdiction, as well as the treatment of asset-backed securities (for example, as LCR eligible assets or not), may be subject to some level of variation between jurisdictions.
Under this approach, the Bank reduces its credit exposure to counterparty when calculating its capital requirements to the extent of risk mitigation provided by the eligible collateral as specified in the Basel III guidelines.
These guidelines on Basel III have been implemented on 1st April 2013 in a phased manner.