Basel III is the latest update to the Accords from the Basel Committee on Banking Supervision. Its aim is to ensure that banks have enough liquidity to survive and strengthen the definition of what is deemed admissible capital.
Mark Young, a Partner for Deloitte’s Risk Services, says the impact on Australian banks will be fairly limited, given the level of funding in the sector here. The Big Four banks here all have strong capital bases, but the same cannot be said of those in many other G20 countries.
The question is, of course, will Basel III, when it is eventually ratified, make any difference to the way banks operate? In some countries, stung hardest by the downturn, local regulations are already stretching well beyond the Basel III reforms.