Homework: Financial Management for Banks
Length: 5000 words.
Given the inherently risky nature of banking activity, bank capital represents a fundamental buffer to cover unexpected losses and to prevent failures which could have highly detrimental impacts on the real economy. In order to protect savings and to maintain public confidence in the functioning of the overall financial system, banks worldwide are subject to intense regulation and supervision.
In this context, the main aim of the Basel Committee on Banking Supervision (BCBS), established in 1974, is to enhance global financial stability by strengthening the prudential regulation and supervision of banks. The Committee has over time published a series of international standards, mostly related to bank capital regulation, widely known as Basel Accords.
In the light of recent global developments, such as the coronavirus (Covid-19) pandemic, and by providing pertinent examples, your task is to:
A. Critically discuss the role and importance of bank capital and the rationale for holding and maintaining adequate capital levels.
B. While providing evidence of the latest developments in international bank capital regulation, critically discuss the implications, benefits and shortcomings of the Basel III agreement.
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.