Overview of the Basel Capital Adequacy Framework
International Journal of Finance and Banking Research
Volume 2, Issue 3, June 2016, Pages: 102-115
Received: Jan. 23, 2016;
Accepted: May 17, 2016;
Published: Jun. 30, 2016
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Orobah Ali Barghouthi, Faculty of Business and Economics, Department of Banking & Finance, Alquds University, Abu Dis, Palestine
Mohammed Bayyoud, Faculty of Business and Economics, Department of Banking & Finance, Alquds University, Abu Dis, Palestine
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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.
Basel Agreement, Capital Adequacy, Pillars 1
To cite this article
Orobah Ali Barghouthi,
Overview of the Basel Capital Adequacy Framework, International Journal of Finance and Banking Research.
Vol. 2, No. 3,
2016, pp. 102-115.
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/
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