The legal impact of Basel III on the Financial Market in the Gulf countries

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Contents

INTRODUCTION3

Outline3

Background3

Problem statement4

Significance4

Target audience4

Research question4

Theoretical framework5

Comparison of Basel II and Basel III5

Ethical consideration5

Reliability and validity6

Methodology6

Limitations7

Gant chart7

REFERENCES8

INTRODUCTION

Outline

Introduction

Background

Problem statement

Significance

Target audience

Research question

Theoretical framework

Comparison of Basel II and Basel III

Ethical consideration

Reliability and validity

Methodology

Limitations

Gant chart

Background

Basel III is the latest proposal issued by Basel committee of BIS (Bank of International Settlement). The issues that had been left unaddressed in the Basel I and Basel II are focused in the latest version. It is believed by the economic analysts and think-tanks that the proposal is set to make its mark in the Saudi financial market and drastically improve the current scenario. This research carries out an in-depth analysis of the propositions made in Basel I and II, and find out its significance for the Saudi financial market.

Problem statement

Basel III requires the banks to hold 2.5% conservation buffer for upcoming stress period and emphasizing that equity must be maintained at 7%. The current study aims to encompass the legal issues that need to be addressed for the successful implementation of Basel III. The study further aims to gauge the positive impact it might have the Saudi market.

 

Significance

Saudi Arab financial market has been a relatively under-researched area. There have not been many studies that can provide one with information about the policies, subsequent challenges, suggestions and their implication for the Saudi economy. Basel III is a new concept and this research will lay down the foundation stone for the future research.

Target audience

The research will be of great consequence to the economic students, analysts, and the businesses directly affected after the implementation of Basel III. Keeping the time and budgetary constraints in mind, the research is narrowed down to the state of Saudi Arab specifically.

Research question

This research aims to answer the following the following question

What led to the formation of Basel III?

What are the potential impediments to the effective implementation of Basel III?

How is the Saudi financial market likely to be affected by this policy?

What would be the legal impact of Basel III on Saudi financial market?

Theoretical framework

Basel III is based on three basic pillars. The first pillar suggests a modern framework for capital. It maintains that there should be a fixed capital maintained by the financial institution and. The second pillar is based on the notion that single or individual banks activities must be evaluated by supervisor who can allocate the minimum capital requirement for that ...