Advances in Economics, Management and Political Sciences
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Advances in Economics, Management and Political Sciences
Series Vol. 78 , 18 April 2024
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Adapting to Change: The Evolution of the Basel Accords and the Chinese Banking Sector's Response
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Abstract
This study presents a comprehensive review of the Basel regulatory framework's development, with an emphasis on the progression from the inaugural Basel I Accord to the definitive Basel III, and its integration into the regulatory practices of the Chinese banking system. It scrutinizes the impact of heightened regulatory standards on the capital adequacy and risk management strategies of Chinese banks, delving into the nuances of risk-weighted asset calibration and credit risk oversight. Through an illustrative case study, the research elucidates the strategic adaptations undertaken by Chinese financial institutions in response to these international norms.The study concludes by critically assessing the Basel reforms, contemplating their profound impact on fortifying the global banking infrastructure and supporting China's pursuit of financial stability. It considers how the reforms have reshaped risk management practices and capital adequacy standards, potentially bolstering the resilience of banks against economic shocks. The reflection extends to the Chinese financial system's adaptation to these international norms, highlighting the strategic shifts undertaken by domestic banks to align with global regulatory expectations while addressing the unique challenges of China's economic landscape. The paper emphasizes the importance of these reforms in enhancing the overall health and stability of financial markets, both internationally and within the context of China's rapidly evolving financial sector.
Keywords
Basel accord, risk management, risk measurement, capital adequacy ratio
References
1. China Banking and Insurance Regulatory Commission. (n.d.).(2022) Total Assets and Total Liabilities of the Banking Sector (Monthly).
2. Wandhöfer, R. (2014). The Journey from Basel I to Basel III: History and fundamentals explained. In R. Wandhöfer (Ed.), Transaction Banking and the Impact of Regulatory Change: Basel III and Other Challenges for the Global Economy (pp. 87–158). Palgrave Macmillan UK. https://doi.org/10.1057/9781137351777_4
3. Basel Committee on Banking Supervision. (2005). The Internal Ratings-Based Approach, Supporting Document to the New Basel Capital Accord.
4. Basel Committee on Banking Supervision. (2011). Basel III: Finalising postcrisis reforms.
5. Cai, Z., & Wheale, P. (2007). The new capital accord and the Chinese banking industry. Journal of Banking Regulation, 8(3), 262–289. https://doi.org/10.1057/palgrave.jbr.2350049
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 3rd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-83558-379-1
- ISBN (Online)
- 978-1-83558-380-7
- Published Date
- 18 April 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/78/20241644
- Copyright
- 18 April 2024
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited