Implementing the Basel framework Course level II
21 July 2023
Basel III is a comprehensive set of reform measures developed by the Basel Committee on Banking Supervision to improve the regulation and supervision of the banking sector. Finalised in December 2017, the full Basel III package addresses the lessons learnt from the financial crisis. In specific terms, Basel III focuses on strengthening the qualitative and quantitative standards within the regulatory capital framework, introduces a global liquidity framework, deploys measures to reduce cyclicality, implements a leverage ratio and provides a basic approach for regulating systemically important banks.
The course aims to provide an overview of the Basel framework and Basel III reforms. The Basel framework is also a major component of the regulatory harmonisation process within the European Union; it was transposed into law via the Capital Requirements Directive IV package and implemented in 2014. A revised package adopted in 2019 mainly concerned the remaining elements of the Basel III reform. This course will therefore also impart comprehensive expert knowledge on major issues relating to the implementation of the Basel III framework in the EU and Germany.
The course will focus on both theoretical and practical components. This is an advanced course that will also address Pillar 2 and implementation issues. In particular, it will introduce and illustrate the European supervisory review process.
- Brief overview and recap of the Basel framework, the motivation behind its revisions and the finalisation of Basel III
- Definition of capital, leverage ratio and capital buffers
- Liquidity – quantitative standards, monitoring tools, management principles (including a case study)
- Risk coverage – credit risk (particularly internal models), securitisation risk, operational risk, market risk (key elements of the FRTB, deep dive into new standardised approach, portfolio exercise)
- ICAAP (Pillar 2) – approaches and principles (overview and case study)
- German and European implementation: supervisory review and evaluation process (SREP) for significant and less significant institutions
- Current regulatory developments
This course is aimed at experts from central banks and supervisory authorities involved in the implementation of Basel III. A good knowledge of the revised framework is essential for participation. Participants should also be familiar with the supervision policies and practices of their home countries’ financial systems and be prepared to actively contribute to discussions.
A nominating person is mandatory for the participation in our in-person courses.