Question

Q2. Saudi banks manage risks using the international capital requirements to cover credit risk, market risk, operational risk and liquidity risk, discuss this statement explaining the current state in Saudi Arabia regarding Basel iii application on banks to cover the mentioned risks and Total risk-based capital ratio components.

Answer 1

SOLUTION:-

BASEL III - Saudi banks full fill Basel III requirements for Capital Adequacy:-

The Basel III standard means to reinforce the prerequisites from the Basel II standard on bank's base capital proportion's . BASEL III ( or the Third Basel Accord or Basel norms ) is a worldwide deliberate administrative system on bank capital ampleness, push testing , and market liquidity chance.

The basel board of trustees on keeping money supervision surveyed the kingdom of saudi arabia's execution of the basel chance based capital system and the liquidity inclusion proportion (LCR)

Saudi banks accomplished capital sufficiency proportion of 20.59% toward the finish of the second from last quarter of 2018, along these lines meeting the necessities of Basel III on the capital ampleness proportion and even surpassed the required rate at numerous stages nearly multiplied, before the choice is authoritative on every worldwide bank before the finish of 2019.

The saudi arabian monetary agency has actively cooperated with national banks in different nations through basel panel teams to examine and contemplate worldwide prescribed procedures for liquidity hazard the executives, which lead the Basel board of trustees to issue joint working papers and application systems for Basel standards in the liquidity.