Basel III in eastern european banking: changes, challenges and implications

Abstract

The financial crisis brought into the light the need to review the existing regulation. For banks, the prudential trend means new rules for capital, liquidity, leverage and a double vision of risks. The aim of this paper is to analyze the situation of four European banking systems (Czech Republic, Poland, Romania and Croatia) in terms of Basel III standards. Structured on three parts, the study presents possible dangers regarding Basel III effectiveness; analyzes the evolutions of capital, leverage and liquidity indicators and points out the future actions for aligning to the new regulation. To conclude, we determine the position of the selected banking systems related to Basel III implementation.