
Discover how banking regulation binds banks to rules and limits to safeguard the financial system, preserve trust, and prevent excessive risk through reserve requirements, capital requirements, and limits on investments.
Regulators license and monitor banks, set minimum capital buffers, and require disclosures, with regulators such as the Federal Reserve, FDIC, FINRA, SEC, OCC, Bank of England, and ECB.
The Basel Committee on Banking Supervision, established in 1974 by the G10, sets global prudential standards to strengthen banking regulation and financial stability, governing Basel I–III under BIS in Basel.
Explains Basle one, also known as Basal Capital Accord, published in 1988, establishing a capital adequacy framework by risk weighted assets and setting an 8% minimum.
Explore credit risk fundamentals under Basel I, detailing default risk and credit deterioration, and how creditworthiness is assessed by internal or external ratings.
Explain basle one advantages, such as higher capital adequacy ratios and competitive equality, and limitations, such as excluding market, operational, and liquidity risks and prioritizing book values over market values.
Apply Basel risk weights: 0% cash and bonds, 20% interbank loans, 50% mortgages, 100% unsecured; subtract goodwill from equity to get tier one, then add tier two to compute ratio.
Apply the Basle one framework to compute risk weighted assets, yielding a total RWA of 1730 and a total capital to RWA ratio of 9.2%.
Compute risk-weighted assets, tier one and total capital, and return on equity for Barclays and OP Financial Group. Contrast loan risk profiles and capital ratios to assess Basel framework implications.
Examine Basel two, the Basel committee's capital framework implemented in 2008, addressing market and operational risks and allowing internal models to assess credit risk and derive risk weights.
Explore Basel II’s three pillars—minimum capital, supervisory review, and market discipline—and how risk weighting, IRP approaches (foundation and advanced), PD, LGD, and EAD shape capital adequacy.
Apply Basel II to compute total capital to risk-weighted assets for Barclays and OP Financial Group, using credit, market, and operational risks, yielding 18.5% and 9.2%.
Analyze Basel III reforms that strengthen Basel I and II by expanding minimum capital, adding leverage and liquidity requirements, in response to the 2008 crisis and governance failures.
Basel III raises capital and quantity, combining common equity tier one, additional tier one, and tier two to 7% of risk-weighted assets, and adds liquidity safeguards like LCR and NSFR.
Apply Basel III to calculate the minimum capital for small, high-risk, and big banks using risk-weighted assets, capital requirements, buffers, and countercyclical rules set by regulators.
Calculate United Bank's liquidity coverage ratio at 118.2% using 130 highly liquid assets and 110 net outflows; Resolute Bank fails Basel III standards with 95.7% leverage.
Calculate available and required stable funding ratios for Blue Bank and Green Bank using ASF factors, RCF risk ratings, and a balanced balance sheet to compare stability and funding adequacy.
Explore Basel 4 reforms to capital requirements, including strengthened standardised credit risk, CVA and operational risk, leverage ratio adjustments, and the 72.5% output floor.
Explore how the Dodd-Frank Act creates regulatory bodies like the FSOC. Understand CCAR stress testing, CFPB consumer protections, and Volcker Rule limits on bank trading.
Analyze the accuracy of statements on major banking regulations, including the Dodd-Frank Act, private equity registration, Volcker Rule, and CCAR stress testing thresholds.
MiFID promotes transparency and standardized disclosure for EU investment firms and banks, safeguarding investors and fair competition, while MiFID II expands scope, unbundles research, and bans inducements.
Global Banking Regulations: A Practical Approach (In simple Language)
The regulation of banks used to be an important but ambiguous area of law. All of that changed in 2008 with the Global Financial Crisis. Suddenly attention was drawn to the way banks were regulated. In this course, we investigate what bank regulation is and what it seeks to achieve. We look in detail at the nature of bank regulation, its objectives, how they came to existence, and the implications of decisions around regulatory systems. This course aims to provide you with the essential tools to understand the fascinating area of regulations.
Bank regulatory frameworks are a vast integration of provisions that could quickly make learning tedious, but with us, you will be taken through those lengthy topics effortlessly and engagingly. This course provides participants with a comprehensive overview of Basel accords with theory and practical workouts. The course covers current regulations (Basel 1,2 and 3) and the Final version of Basel III (commonly referred to as ‘Basel IV’). Get a deeper understanding of how credit, market, operational and other risks were mitigated in the evolution of the Basel accords. This is a practical course where real-life examples, case studies, and exercises illustrate key learning points and enable participants to apply the concepts delivered throughout the course.
Starting from a brief introduction to Bank Regulation and Basel Committee, we have prepared an explicit sequence of topics covering all versions of the Basel accord- Basel 1, its risk-weighting system, advantages and limitations, practical exercises on capital adequacy, and return on equity. Basel 2 accord its three pillars, limitations of Basel 2, and its techniques to calibrate banks’ capital adequacy with practical exercises. Basel 3 framework its features and sensible workouts, which include methods used by banks to calculate the capital adequacy, return on equity, the liquidity coverage ratio, and the stable funding ratio. Basel 4 framework and the advancement made into it.
This course also covers other bank regulatory frameworks like the Dodd-Frank Act in the US, with all the provisions it offers like the Financial Stability Oversight Council (FSOC), Dodd-Frank ACT Stress test (DFAST), the Volcker Rule, Sarbanes-Oxley Act, and many more. Then you will go through European Union frameworks like the Markets in Financial Instruments Directive (MiFID), MiFID 2, and MiFIR.
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