Limitations and hurdles in the implementation of Basel II in Financial system

By



ACKNOWLEDGEMENT

I am very grateful to God who has given me the grace to start this course and end it successfully. I would like to thank my family, who worked really hard and stood by me all the way. God bless my family who gave me full support and encouraged me. I would like to thank my supervisor, for her patience and support. Finally to my friends and all who have made the completion of this project a success, thank you and God bless you.

DECLARATION

I declare that the work in this dissertation was carried out by me. The project is my own original work and has not been submitted elsewhere in fulfilment of the requirements of this or any other award.

SIGNED: ............................................................. DATE: ..........................

ABSTRACT

The major purpose of this dissertation was to examine the limitations and hurdles in the implementation of Basel II in Financial System of any organisation. There was also a need to assess the usefulness of Basel II regulations in Banking Industry. It was important to see the relationship various variables which were discussed in the study. There were 30 participants who were selected as a sample size for the study. An interview was conducted with the help of open ended questions provided to 30 respondents. The responses were generated with the help of interview questions where each one of them answered all the questions in detail. All the respondents were professionals in their service and they gave an answer based on the knowledge they had regarding the Basel II regulations. In the end, they provided a lot of important evidence which is crucial for the limitations and hurdles in the implementation of Basel II in Financial System of an organisation. Therefore, these were the major issues related to research study that was discussed in detail.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1 Overview of the topic1

1.2 Statement of the Problem3

1.3 Research Questions3

1.4 Significance of the Study3

CHAPTER 2: LITERATURE REVIEW5

2.1 Background of the Basel II5

2.2 First Pillar OF Basel II- Minimum Capital Requirements6

2.3 Second Pillar of Basel II- Supervisory Review Process9

2.4 Third Pillar of Basel II- Market Discipline10

2.5 Enterprise Governance and Risk Management10

2.6 Operational Risk Management15

2.7 Information Security and Information Technology Risk19

2.8 The impact of Global Financial Crisis on Basel II22

2.9 The level of Risk in Bases II Accords24

CHAPTER 3: METHODOLOGY27

3.1 Overview of Research Methodology27

3.2 Qualitative and Quantitative Analysis28

3.3 Theoretical model29

3.4 Sample Size for the study29

3.5 Research Instrument30

3.6 Limitations of the Study30

3.7 Informed Consent31

3.8 Validity and Reliability32

3.9 Ethical Concerns for the Research33

CHAPTER 4: DISCUSSION AND ANALYSIS34

4.1 Overview of the Data Analysis34

4.2 Responses Generated from the Study35

4.3 The importance of the results generated from Data Analysis38

4.4 Overall Findings of the Study41

CHAPTER 5: CONCLUSION44

5.1 Summary of the topic44

5.2 Limitations of the Study46

5.3 Recommendations for the Study47

REFERENCES50

CHAPTER 1: INTRODUCTION

Overview of the topic

The financial system and its stability are essential for the economic growth of countries and for the well being of ...