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Basel III: In quest for criteria and scenarios of the banking regulation reform advancement
https://doi.org/10.32609/0042-8736-2016-2-77-93
Abstract
The article looks into the spillover effect of the sweeping overhaul of financial regulation, also known as Basel III, for credit institutions. We found that new standards of capital adequacy will inevitably put downward pressure on ROE that in turn will further diminish post-crisis recovery of the banking industry. Under these circumstances, resilience of systemically important banks could be maintained through cost optimization, repricing, and return to homogeneity of their operating models, while application of macroprudential regulation by embedding it into new regulatory paradigm would minimize the effect of risk multiplication at micro level. Based on the research we develop recommendations for financial regulatory reform in Russia and for shaping integrated banking regulation in the Eurasian Economic Union (EAEU).
Keywords
Basel III,
return on equity,
ROE,
systemically important financialinstitution,
SIFI,
Russian banking sector,
Eurasian Economic Union,
EAEU
JEL: E58, F65, G21, G28, K23
About the Author
E. Dzhagityan
Financial University under the Government of the Russian Federation
Russian Federation
Russian Federation
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For citations:
Dzhagityan E. Basel III: In quest for criteria and scenarios of the banking regulation reform advancement. Voprosy Ekonomiki. 2016;(2):77-93. (In Russ.) https://doi.org/10.32609/0042-8736-2016-2-77-93
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