Task 3 (14 marks)
In the after mass of the European Debt Crisis, Basel III Capital Accord introduced by the Bank for International Settlements were implemented in Australia in Jan 2013 and have had significant impacts on the way commercial banks operate in Australia.
- Discuss the main reason(s) for the implementation of Basel III. (5 marks)
- Identify and discuss the outcomes the Australian Prudential and Regulation Authority (APRA) expects to achieve through this implementation. (4 marks)
- Countercyclical capital buffer (CCB) is one of the key focus of Basel III on the standards for risk-based capital of financial institutions. Demonstrate your understanding of systemic risk and the use of CCB to moderate systemic risk. (5 marks)