Overview of the Basel Capital Adequacy Framework
Overview of the Basel Capital Adequacy Framework
Date
2016-06-30
Authors
Barghouthi, Orobah Ali
Bayyoud, Mohammed
Journal Title
Journal ISSN
Volume Title
Publisher
Science Publishing Group
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.
Description
Keywords
Basel Agreement, Capital Adequacy, Pillars 1
Citation
Orobah Ali Barghouthi, Mohammed Bayyoud. Overview of the Basel Capital Adequacy Framework. International Journal of Finance and Banking Research. Vol. 2, No. 3, 2016, pp. 102-115. doi: 10.11648/j.ijfbr.20160203.15