Bakgrund: De svenska företagens lånebaserade finansiering har historiskt sett mestadels utgjorts av banklån framför företagsobligationer. Efter finanskrisens start 2008, och fram till och med fjärde kvartalet år 2012, har den svenska företagsobligationsmarknaden vuxit med drygt 60 procent. I media framställs en bild där regelverket Basel III har gjort och kommer göra företagsobligationsmarknaden till en viktigare finansieringskälla för svenska företag. En studie om företagsobligationsmarknaden efterfrågas av Svenskt Näringsliv. Syfte: Syftet med studien är att kartlägga och utifrån institutionell teori analysera hur de ekonomiska förutsättningarna för den svenska företagsobligationsmarknaden har förändrats sedan år 2008. Genomförande: För att uppnå studiens syfte har ett kvalitativt tillvägagångssätt tillämpats. Empirin har samlats in genom semistrukturerade intervjuer med aktörer på företagsobligationsmarknaden. En intervjuguide utformades med grund i institutionell ekonomisk teori, med fokus på transaktionskostnader. Samma teoretiska referensram har sedan använts för att analysera den insamlade empirin. Slutsats: Tiden innan år 2008 kännetecknades av att företagen valde banklån. Detta för att bankerna kunde hantera banklån till låga transaktionskostnader. Institutionella förändringar sedan år 2008 har lett till att transaktionskostnaderna sänkts på företagsobligationsmarknaden. Företagsobligationer har således blivit ett bättre alternativ för många företag, även fast små företag fortfarande är utestängda från marknaden. / Background: Swedish corporates’ debt financing have historically mostly consisted of bank loans instead of corporate bonds. Since the beginning of the financial crisis of 2008, leading up to the fourth quarter of 2012, the Swedish corporate bond market has grown by over 60 per cent. Media coverage of the market presents a picture where the corporate bond market has become an important source of financing as a result of the legal framework Basel III. A study of the corporate bond market has been requested by the Confederation of Swedish Enterprise. Aim: The purpose of the study is to identify and, by the use of institutional theory, analyse how the market conditions in the Swedish corporate bond market have changed since the year of 2008. Completion: To achieve the purpose of the study a qualitative research method has been applied. Empirical data have been collected through semi-structured interviews with stakeholders in the Swedish corporate bond market. An interview guide was designed from an institutional theory perspective with a focus on transaction costs. The same theoretical framework has been used to analyze the empirical data. Conclusion: Before the year of 2008, debt financing was characterised by bank loans. This was the result of the banks’ ability to keep transaction costs low. Since the year of 2008, institutional changes have decreased transaction costs on the Swedish corporate bond market. Corporate bonds have become a more attractive alternative for many companies, even though small companies are still excluded from the market.

Thesis (MBA)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: According to Vestergaard and Wade (2012:486), “No financial or bank crisis has ever occurred from something ex-ante perceived as risky”. On the contrary – according to Per Kurowski (2010 in Vestergaard & Wade 2012:486) “they have all resulted, no exceptions, from excessive lending or investment in something perceived as not risky”. BASEL III, also known as the Third BASEL Accord, was developed by the Basel Committee on Banking Supervision (BCBS) as a comprehensive set of measures to strengthen regulation and risk management and, in doing so, to reform the way in which the banking sector operated in the past (International regulatory framework for banks (Basel III), 2014). According to Zerbst (2013), Basel III was introduced as a direct result of the financial crisis that hit the United States and spread throughout the world in 2008. After the financial crisis, the financial world lost confidence in banks in general. This made the regulators wary and the Basel Committee on Banking Supervision (BCSB) was formed. They were tasked to investigate how existing regulations could be revised to safeguard banks from landing in a similar situation. Currently, South African banks meet the minimum regulatory capital requirements introduced by Basel III. Capitec and African Bank Investments Limited (ABIL) are two prominent banks in the South African unsecured lending market. These two banks, although they seem alike, do not operate in the same way. They have different funding bases. Furthermore, unlike ABIL, Capitec does not have a furniture and appliance component (African Bank, 2014). This report aims to understand how Capitec and ABIL’s risk models measure up to what Basel III proposes banks use. The analysis in this research report will enable the reader to understand the capital structure of Capitec Ltd and ABIL better. This approach will allow for a better estimation of capital structure within the unsecured banking industry. This research report can further serve as an example of capital risk analysis for other bank executives in South Africa. A further benefit for this research is that it can be used as a case study for lecturers teaching corporate finance at academic institutions.

The term procyclicality refers to the ability of a system to amplify business cycles. The recent financial crisis has revealed that the current regulatory framework, Basel II, affects the business cycle in exactly that manner. The newly published Basel III therefore sought to include tools that would mitigate the procyclical nature of regulatory framework. The aim of the thesis is to analyze whether such tools are effective and whether the procyclicality under Basel III has been mitigated when compared to Basel II. In order to conduct such analysis we employ a simple model with the households and firms sector. Using the OLS estimation method we estimate the sensitivity of Basel risk weights to the business cycle under both Basel II and Basel III conditions. As the Basel III framework has been published only recently, there are few studies that would analyze its effect on procyclicality. The main contribution of this thesis consists of implementation of Basel III countercyclical tools and the comparison between both frameworks. The thesis further contributes to the existing literature by conducting the analysis on the data for the Visegrád Group, that is for the Czech Republic, Slovakia, Hungary and Poland. JEL Classification E32, E44, E58, G21 Keywords procyclicality, Basel II, Basel III, banking...

In order to address the deficiencies in the banking regulation revealed by the recent financial crisis the Basel III introduces two minimum standards for funding liquidity, Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). The goal of this thesis is to analyze whether the NSFR is defined optimally or whether the Basel Committee on Banking Supervision (BCBS) will be forced to relax NSFR conditions similarly as happened by the LCR. Based on the approximation of the NSFR between 2007 and 2012 for a sample of 3 128 European banks we test the ability of banks to satisfy the NSFR. Our results suggest that the European banks have not started to converge to the NSFR yet. Despite this fact they should not have problems with meeting this requirement as 40.3% of banks in our sample would have already satisfied the NSFR in 2011. A Probit model analysis suggests that the NSFR requirement will decrease the probability of bank defaults and therefore increase the stability of the banking sector in the future which proves that the NSFR is correctly specified. Moreover, a simple stress testing shows that the stability of the system would not be improved anymore if the NSFR was defined more strictly. The current version of the NSFR therefore seems to be optimal and in our opinion should be...

This study assesses the impact of the Basel III regulatory framework on interbank contagion. It focuses on the direct interbank contagion that spreads via interbank foreign claims among national banking sectors. A balance sheet-based network model employs the quarterly consolidated banking statistics, collected by the Bank for International Settlements, to simulate the consequences of credit and funding shock under stressed market conditions. Compared to the Basel II, the Basel III regulatory framework reduces the probability of interbank contagion (following a simulated default of one banking sector) from 31% to 14% and lowers the impact of contagion by 63% in terms of average loss for a banking sector. The simulations under both regulatory frameworks show that relatively smaller banking sectors can trigger severe interbank contagion comparable to large banking sectors. Throughout the 2005-2009 period, the Basel III regulatory framework stabilizes the fluctuations of the scope of interbank contagion.

The Basel III accord is the cornerstone of global financial reform efforts that seek to guard against the types of financial crisis seen in 2007/8. It requires banks to fund more of their activities with better-quality capital and, in so doing, attempts to assure that they are better able to absorb shocks that can lead to crises. However, capital requirements come with a range of costs, which could spark a slowdown in credit or a change in the types of lending banks engage in. This paper conducts a comprehensive literature review of theoretical and empirical studies of the impacts of previous Accords, Basel I and Basel II, and attempts to draw lessons on possible downside effects of the latest iteration of the Basel Accord. It proceeds in three parts. Part 1 explores the history of the Basel Accords, exploring their theoretical basis and the evolution of the regulation into its current form. This section identifies two possible mechanisms by which capital regulation can negatively impact the broader economy: increasing capital costs and increasing risk aversion. Part 2 explores the potential for increased capital cost, while Part 3 examines the possibility of excessive risk aversion. In conclusion, the paper finds that while the potential for downside effects does exist, these are not likely to be significant, and seem particularly unlikely to have a major impact in the South African case.

Thesis (M.M. (Public and Development Management))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Wits School of Governance, 2016. / Title: The relevance of the Basel III Accord within South African Banking. There are numerous countries which are regulated by the Basel II Accord that manifested different results from the 2007 subprime crisis. The United States and some European Countries emanated the subprime crises and experienced massive decline in market confidence as write-offs became the order of the day. The write offs became so severe that the Federal Bank of the United States had to step in to offer massive bailouts to rescue the American banking industry. However, conversely to what happened in America, there some countries (including South Africa) which were also regulated by the Basel II Accord but did not experience massive write-offs as a result of the subprime crisis? This begs a question of whether there is a deeper reason for the failure of the American and European banking system to the extent that they had to bailout their banks during the 2007 financial crisis. With this question remaining unanswered, there remains skepticism on whether a country regulator can rely on implementing the Basel III Accord for improved banking sector resilience. In particular, the stringent requirements of the introduction of liquidity standards will be costly to implement in South Africa. Therefore, a question will need to be asked whether the Basel III Accord is relevant in South Africa. / GR2018

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Background: Small businesses are considered as a valuable source for the society and the economic growth and bank loan is the main source of finance for them. Small businesses are commonly seen as riskier than larger businesses it is thus noteworthy to examine banks’ credit assessment for small businesses. The implementation of the Basel III Accord will start in 2013 with the aim to generate further protection of financial stability and promote sustainable economic growth, and the main idea underlying Basel III is to increase the capital basis of banks. Purpose: The purpose of this study is to describe how larger and smaller banks in Sweden are managing credit assessment of small businesses, and if this process differs according to the size of the bank. The authors further want to investigate how expectations of new capital regulations, in form of Basel III, affect the credit assessment and if it is affecting the ability of small businesses to receive loans. Method: In order to meet the purpose of the thesis a mixed model approach is used. The authors conducted semi-structured interviews with representatives from three smaller and three larger banks. Additional, statistics were computed in order to examine the economic state of the Swedish market, where also an archival research with 10 allocated banks operating with corporate services was executed. Conclusions: The banks have a well-developed credit process where building a mutual trust relationship with the customer is crucial. If the lender has a good relationship with the customer, it will ease the collection of credible information and thus enhance the process of making right decision. The research examined minor differences between smaller and larger banks in their credit assessment. Currently, the banks do not see any problems with adjusting to the new regulation and thus do not see specific effects for small businesses and their ability to receive loans. The effects that can be identified by the expectations of Basel III are the banks’ concern of charging the right price for the right risk and the demand of holding more capital when lending to businesses. The banks have come a long way on the adjustment to Basel III, which has pros and cons, thus it implies that banks are already charging customers for the effect of the regulations that will not be 100 percent implemented until 2019. The difference that was identified between larger and smaller banks is that larger banks seem to have more established strategies when working on the implementation of Basel III.

The banking sector plays an important part of the modern society and a collapse of the financial system would have severe consequences for the society. In order to protect the system from a systemic collapse, regulations have been put in place to ensure a more stable financial system. Because of the financial instabilities experienced in recent years, the Basel Committee has released an improved framework in order to deal with the systemic risk which contributed to the crisis. Parts of the new Basel III Accord will be implemented in 2013, and this is why we have chosen to study how Swedish banks perceive the impact of the Basel III Accord and its effect on systemic risk. Our intention is to study the perception of the impact of the Basel III framework on the Swedish bank sector through a study of the four largest banks in Sweden. We examine how these four banks expect the Basel III Accord to affect systemic risk and consequently improve the protection of these banks, and also the Swedish banking industry and more generally the Swedish economy. The research paradigm of this study is constructivism, which is in line with our research question and purpose, since we have studied and analyzed the perceptions of the Swedish banking sector. In order to answer our research question and purpose we have used an inductive research approach, as well as a qualitative research strategy. The data was collected through 10 semi-structured interviews with people from the four largest banks in Sweden. The theoretical frame of reference is divided into four parts. The first part consists of a discussion on the Swedish banking sector, as well as a presentation of the four largest banks. In the second part of the chapter we review the current research regarding systemic risk. We then present the most important aspects and elements of the forthcoming Basel III Accord and at last we assemble the three areas together in a final discussion. The findings in the study disclose new knowledge. The knowledge consist of the Swedish banks’, through the 10 interviewees, perception of the impact of the Basel III Accord and its effect on systemic risk. The Swedish banks hold a positive perception of: higher capital requirements set out in Basel III, the counter cyclical buffer, the basic concept of implementing liquidity standards, the Basel III will (1) to some degree reduce systemic risk, (2) improve the protection of the Swedish banks, (3) decrease the probability of financial instabilities, and (4) enhance the Swedish banks ability to meet a new financial crisis. The Swedish banks hold a neutral perception of: the risk coverage and the LCR. The Swedish banks hold a negative perception of: the higher capital requirements implemented in Sweden, the frameworks’ competitive disadvantage, the capital conservation buffer, the NSFR, the leverage ratio, that the Basel III will (1) increase costs that will affect customers, shareholders and/or employees negatively, (2) impair growth, and (3) not be able to prevent a new kind of financial crisis.