EBI Publications

the studies showed that for African and Emerging Economies other areas of improvements are equally critical to financial stability rather than Basel III requirements. These might include: 1) Enhancing disclosure of high quality information, 2) including transparent and internationally accepted accounting principles, 3) Promoting the adoption of good corporate governance to maintain public confidence in the banking sector, 4) increasing compliance with the Basel core principles for Effective Banking Supervision and finally strengthening the legal and institutional framework by introducing a crisis management system and resolution process Basel III will make a major difference to the financial system operations: virtually banks and financial systems will be safer but more expensive. For that matter, if banks implemented a Basel II solution before going forward with Basel III which is the case of most banks in countries thus banks should accommodate easily depending on their capabilities to the reforms of Basel III. Although the new capital requirements will have a limited impact on access to credit due to the long term execution of these changes, smaller banks will be forced “at least temporarily” to restrain lending in order to comply with Basel III and access to credit will become more difficult especially for small and medium sized enterprises. Moreover, as the new regulations leave out non-bank institutions, bigger firms might consider diversified ways of financing, such as by raising equity or issuing debt (i.e. selling debt bonds on the open market as a source of finance).Basel III is changing the way that banks address the management of risk and finance. The new regime seeks much greater integration of the finance and risk management functions. The new emphasis on risk management that is inherent in Basel III requires the introduction or evolution of a risk management framework that is as robust as the existing finance management infrastructures. As well as being a regulatory regime, Basel III in many ways provides a framework for true enterprise risk which involves covering all risks to the business. In this context, it’s important to highlight Email: Research@ebi.gov.eg Website: www.ebi.gov.eg Facebook: facebook.com/EgyptianBankingInstitute

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