Overview of the Basel Capital Adequacy Framework

Orobah Ali Barghouthi; Mohammed Bayyoud

doi:doi:10.11648/j.ijfbr.20160203.15

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Overview of the Basel Capital Adequacy Framework

Orobah Ali Barghouthi, Mohammed Bayyoud

Published in International Journal of Finance and Banking Research (Volume 2, Issue 3)

Received: 23 January 2016 Accepted: 17 May 2016 Published: 30 June 2016

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Abstract

This paper examines Capital Adequacy Framework that specifies the approaches for quantifying the Risk-Weighted Assets (RWA) for credit risk, market risk and operational risk. The computation of the risk-weighted assets is consistent with Pillar 1 requirements set out by the Basel Committee on Banking Supervision (BCBS) and the Islamic Financial Services Board (IFSB) in their respective documents - “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” issued in June 2006 and the “Capital Adequacy Standard (CAS)” issued in December 2005. While the Bank believes that such customization could be justified, a pragmatic approach is adopted for implementation. Higher prudential requirements and risk management standards would be introduced gradually taking into consideration industry feedback during the consultation process.

Published in	International Journal of Finance and Banking Research (Volume 2, Issue 3)
DOI	10.11648/j.ijfbr.20160203.15
Page(s)	102-115
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Basel Agreement, Capital Adequacy, Pillars 1

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[3]	“Estimating the trend of M3 income velocity underlying the reference value for monetary growth” by C. Brand, D. Gerdesmeier and B. Roffia, May 2002.
[4]	“Labour force developments in the euro area since the 1980s” by V. Genre and R. Gómez-Salvador, July 2002.
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[6]	“Banking integration in the euro area” by I. Cabral, F. Dierick and J. Vesala,December 2002.
[7]	“Economic relations with regions neighbouring the euro area in the ‘Euro Time Zone’” byF. Mazzaferro, A. Mehl, M. Sturm, C. Thimann and A. Winkler, December 2002.
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[10]	“The acceding countries’ strategies towards ERM II and the adoption of the euro:an analytical review” by a staff team led by P. Backé and C. Thimann and includingO. Arratibel, O. Calvo-Gonzalez, A. Mehl and C. Nerlich, February 2004.

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APA Style

Orobah Ali Barghouthi, Mohammed Bayyoud. (2016). Overview of the Basel Capital Adequacy Framework. International Journal of Finance and Banking Research, 2(3), 102-115. https://doi.org/10.11648/j.ijfbr.20160203.15

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ACS Style

Orobah Ali Barghouthi; Mohammed Bayyoud. Overview of the Basel Capital Adequacy Framework. Int. J. Finance Bank. Res. 2016, 2(3), 102-115. doi: 10.11648/j.ijfbr.20160203.15

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AMA Style

Orobah Ali Barghouthi, Mohammed Bayyoud. Overview of the Basel Capital Adequacy Framework. Int J Finance Bank Res. 2016;2(3):102-115. doi: 10.11648/j.ijfbr.20160203.15

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@article{10.11648/j.ijfbr.20160203.15,
  author = {Orobah Ali Barghouthi and Mohammed Bayyoud},
  title = {Overview of the Basel Capital Adequacy Framework},
  journal = {International Journal of Finance and Banking Research},
  volume = {2},
  number = {3},
  pages = {102-115},
  doi = {10.11648/j.ijfbr.20160203.15},
  url = {https://doi.org/10.11648/j.ijfbr.20160203.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20160203.15},
  abstract = {This paper examines Capital Adequacy Framework that specifies the approaches for quantifying the Risk-Weighted Assets (RWA) for credit risk, market risk and operational risk. The computation of the risk-weighted assets is consistent with Pillar 1 requirements set out by the Basel Committee on Banking Supervision (BCBS) and the Islamic Financial Services Board (IFSB) in their respective documents - “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” issued in June 2006 and the “Capital Adequacy Standard (CAS)” issued in December 2005. While the Bank believes that such customization could be justified, a pragmatic approach is adopted for implementation. Higher prudential requirements and risk management standards would be introduced gradually taking into consideration industry feedback during the consultation process.},
 year = {2016}
}

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TY  - JOUR
T1  - Overview of the Basel Capital Adequacy Framework
AU  - Orobah Ali Barghouthi
AU  - Mohammed Bayyoud
Y1  - 2016/06/30
PY  - 2016
N1  - https://doi.org/10.11648/j.ijfbr.20160203.15
DO  - 10.11648/j.ijfbr.20160203.15
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
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EP  - 115
PB  - Science Publishing Group
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AB  - This paper examines Capital Adequacy Framework that specifies the approaches for quantifying the Risk-Weighted Assets (RWA) for credit risk, market risk and operational risk. The computation of the risk-weighted assets is consistent with Pillar 1 requirements set out by the Basel Committee on Banking Supervision (BCBS) and the Islamic Financial Services Board (IFSB) in their respective documents - “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” issued in June 2006 and the “Capital Adequacy Standard (CAS)” issued in December 2005. While the Bank believes that such customization could be justified, a pragmatic approach is adopted for implementation. Higher prudential requirements and risk management standards would be introduced gradually taking into consideration industry feedback during the consultation process.
VL  - 2
IS  - 3
ER  -

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Author Information

Orobah Ali Barghouthi

Faculty of Business and Economics, Department of Banking & Finance, Alquds University, Abu Dis, Palestine
Mohammed Bayyoud

Faculty of Business and Economics, Department of Banking & Finance, Alquds University, Abu Dis, Palestine

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APA Style

Orobah Ali Barghouthi, Mohammed Bayyoud. (2016). Overview of the Basel Capital Adequacy Framework. International Journal of Finance and Banking Research, 2(3), 102-115. https://doi.org/10.11648/j.ijfbr.20160203.15

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ACS Style

Orobah Ali Barghouthi; Mohammed Bayyoud. Overview of the Basel Capital Adequacy Framework. Int. J. Finance Bank. Res. 2016, 2(3), 102-115. doi: 10.11648/j.ijfbr.20160203.15

Copy | Download

AMA Style

Orobah Ali Barghouthi, Mohammed Bayyoud. Overview of the Basel Capital Adequacy Framework. Int J Finance Bank Res. 2016;2(3):102-115. doi: 10.11648/j.ijfbr.20160203.15

Copy | Download

@article{10.11648/j.ijfbr.20160203.15,
  author = {Orobah Ali Barghouthi and Mohammed Bayyoud},
  title = {Overview of the Basel Capital Adequacy Framework},
  journal = {International Journal of Finance and Banking Research},
  volume = {2},
  number = {3},
  pages = {102-115},
  doi = {10.11648/j.ijfbr.20160203.15},
  url = {https://doi.org/10.11648/j.ijfbr.20160203.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20160203.15},
  abstract = {This paper examines Capital Adequacy Framework that specifies the approaches for quantifying the Risk-Weighted Assets (RWA) for credit risk, market risk and operational risk. The computation of the risk-weighted assets is consistent with Pillar 1 requirements set out by the Basel Committee on Banking Supervision (BCBS) and the Islamic Financial Services Board (IFSB) in their respective documents - “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” issued in June 2006 and the “Capital Adequacy Standard (CAS)” issued in December 2005. While the Bank believes that such customization could be justified, a pragmatic approach is adopted for implementation. Higher prudential requirements and risk management standards would be introduced gradually taking into consideration industry feedback during the consultation process.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Overview of the Basel Capital Adequacy Framework
AU  - Orobah Ali Barghouthi
AU  - Mohammed Bayyoud
Y1  - 2016/06/30
PY  - 2016
N1  - https://doi.org/10.11648/j.ijfbr.20160203.15
DO  - 10.11648/j.ijfbr.20160203.15
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 102
EP  - 115
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20160203.15
AB  - This paper examines Capital Adequacy Framework that specifies the approaches for quantifying the Risk-Weighted Assets (RWA) for credit risk, market risk and operational risk. The computation of the risk-weighted assets is consistent with Pillar 1 requirements set out by the Basel Committee on Banking Supervision (BCBS) and the Islamic Financial Services Board (IFSB) in their respective documents - “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” issued in June 2006 and the “Capital Adequacy Standard (CAS)” issued in December 2005. While the Bank believes that such customization could be justified, a pragmatic approach is adopted for implementation. Higher prudential requirements and risk management standards would be introduced gradually taking into consideration industry feedback during the consultation process.
VL  - 2
IS  - 3
ER  -

Copy | Download