Monitoring Implementation of Basel III Article Critique

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Subsequently, assessment for Singapore, China and Switzerland are now in progress. These indicate a progressive and positive outcome of the regulatory framework. The RCAP does not work in isolation, as these assessments do not guarantee successful implementation; hence, it works with sound supervisory and industry practices accompanied by rigorous enforcement and analysis of the expected prudential outcomes.

RCAP studied the effect of the regulations on the banks as well as the variations across the banks in terms of the risk-weighted assets. From the assessments, it indicates that, while some variations in risk-weighted assets are natural and desirable, the extreme variations diminish the comparability of the capital ratios. Consequently, the Basel committee is undergoing further analysis to determine the areas that the standards can modify to reduce the extreme variations that are apparent. In the considerations, three policies emerge; these are, to improve the public disclosure and regulatory data collection to aid the understanding of the calculation of risk-weighted assets for the banks. Secondly, the committee is considering narrowing the choices of modeling for the banks and lastly, the option of harmonizing the supervisory practices with regard to the model approvals. In this context, the committee is conducting a fundamental review of the market risk framework, which will address the key findings concerning the risk measurement of the trading asset book. The committee is progressively working to finalize the development of the post-crisis reforms. These include the remaining components of the Basel III framework. These include the liquidity frames, liquidity coverage ratio, the net stable funding ratio, securitization, large exposures and the leverage ratio all published in the year 2013 (BCBS 5). The committee hopes to complete these reforms by the year 2014. The emphasis of the adoption and implementation of the Basel framework remains remarkably essential.

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Its implementation should be timely and fully implemented. The Basel committee continues to strengthen its implementation monitoring progress and efforts and the RCAP. In addition, it urges the G20 Finance Ministers and Central Bank Governors to rejuvenate their commitments in the completion of the Basel III regulatory reforms expeditiously, completely and consistently.

From the year 2010, the Basel Committee periodically monitored sample banks for progress in its member jurisdiction, and this provides an overview for adjustment requirements (BCBS 6). The full implementation of the framework in the various nations contributed immensely in the success of these banks in the preceding years. Therefore, the committee aims to complete the other components of the frameworks; which will see the banks gain a significant momentum in the step towards managing the currency and bank crisis in the world. Neither do suggestions for policy options comprehensive nor pre-empting any policy measures. They are directions for a future work that will help in creating a stronger and effective framework that is exclusive. The committee also intends to release a paper setting its thinking of the relevant policy trade-offs and additional potential policy options.

Therefore, the Basel III framework, despite being incomplete, it is receiving wide acceptance in the member countries, and the outcomes are positive. The recommendations by the committee for further improvements show the progression of the implementation process. The regulatory and supervisory factors in the process of implementation are effectively enhancing and facilitating the adoption and implementation process of the Basel III framework.

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