Basel

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  • Topic: Basel II, Banking, Capital requirement
  • Pages : 17 (5407 words )
  • Download(s) : 112
  • Published : May 15, 2013
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Letter of Transmittal
May 30, 2013
Md. Zaiul Hoque Zia
Lecturer
Finance
BGC Trust University Chittagong, Bangladesh.
Subject: Submission of assignment
Dear Sir,
It is a great pleasure for me to submit the assignment on ―’Implementation of BASEL of bank risk management Following the Statutory Requirement. I am submitting this assignment. As my faculty supervisor, I have tried to prepare the report following your instructions. The purpose of the report is based on my working experience and how the bank has implemented of BASEL of bank risk management.

I will be glad if you kindly accept this assignment.
Thanking you.
Sincerely,
___________________
Md. Rashidul Islam Khan
ID: 110302139

Preface
This paper addresses an important contemporary issue; namely the implementation of the Basel Accord worldwide. The Basel Accord provides a series of measures to improve the stability of the world’s financial system but its implementation poses a number of challenges for both developing and emerging economies. Bangladesh faces a number of unique challenges in this regard due to its recent economic expansion and the fact that the rate at which the Basel Accord is being adopted lags behind that of other countries. This paper throws light on this and a number of related issues due to a combination of the novelty of the survey data from risk managers coupled with a rigorous statistical analysis. Results reflect that the Basel Accord is generally well regarded due to its underlying aims of improved capital standards and a scientific treatment of risk. However, operational risk emerges as a key barrier to implementation in Bangladesh. A number of further obstacles are highlighted, which, do seem to have been addressed although only with a partial degree of success. Privately owned banks appear to be more technically competent and more favorably disposed towards implementation than publicly owned banks.

ACKNOWLEDGEMENT
First of all I would like to my cordial thanks for almighty Allah whose uniqueness, oneness, and wholeness are unchallengeable guided us in difficult circumstances. All respects are for his holy prophet Hazrat Muhammad (SM) Peace be upon him, who enable us to recognize the oneness my creator.

I would like to thank Mr. Ziaul Hoque Zia, my university supervisor for guiding me in planning and composing the assignment. He was always available to provide me with his supervision and guidance during the entire course. Therefore, I express colossal appreciation for his aid.

From the early hours of the morning to the sunset of the evening they have guided me through various operations of the study and provided me with essential support for my assignment. I pray to Allah that He be merciful to all of these people. Last but not the least thanks goes to my parents for bearing the tension, frustration and all the hard work along with me through the entire MBA program.

EXECUTIVE SUMMARY
In its depth and scope, Basel is unlike anything the banking business has seen. A combination of micro- and macro-prudential norms, the global regulatory mandate (which rolls out this year through 2018)1 requires banks to increase their quality of capital by focusing on liquidity and common equity; improve supervision of firm-wide risk management; and provide detailed reporting on regulatory capital and the calculation of capital ratios. It mandates adherence to ratios such as liquidity coverage and net stable funding, which are aimed at strengthening banks’ short and long-term liquidity. Most prominently, Basel is transforming risk management into a function that fortifies banks’ sound functioning. These changes will necessitate a fundamental review of each bank’s operating model. Many banks will need to decide which businesses and geographies to focus on and which to exit. Almost all banks will need to invest in technology capabilities to meet Basel III’s stringent data reporting and risk management requirements....
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