The banking sector plays a pivotal role in the economy in which it operates. It is therefore imperative to institute international regulatory bodies and regulations which will ensure the protection of all stakeholders in the sector. The adoption and implementation of the Basel Accords and their revised versions has been encouraged at The World Bank level, but the opinions and studies regarding the impact of the tightened regulations on the banking sector generated varied reactions. The objective of this research was to establish whether the increased capital requirements regulations, as guided by The Basel Accords, had negatively impacted the bank domestic lending of the countries which implemented the regulations by 2012. This quantitative research involved comparison of the domestic lending rates as a percentage of GDP of the countries which implemented Basel II for the years before, and after the implementation. The study has revealed that, despite the concerns that the increased capital requirements regulations would increase the lending costs, the implementation of these regulations did not negatively affect domestic lending from the banking sector. This research document concludes by recommending a few process guidelines which the global banking regulators might consider during the implementation of Basel III. / Dissertation (MBA)--University of Pretoria, 2013. / ccgibs2014 / Gordon Institute of Business Science (GIBS) / MBA / Unrestricted

A key lesson learnt from the 2007-2009 global financial crisis was that central banks focused too much on price stability and monetary policy. Financial stability and macroprudential policy were the missing pillars to ensure proper supervision of the financial system. This study examines the challenges faced by central banks in implementing macroprudential policies, while having limited experience as to the effect on their economies. The countercyclical capital buffer is generally considered to be one of the main macroprudential policy instruments. Using South African data, the study furthermore calculates the credit gap which serves as early warning indicator of excessive credit growth and is used to determine the point at which a countercyclical capital buffer should be activated for banks. The calculation of the countercyclical buffer indicates that the credit gap remains below the lower threshold of the buffer add-on. Hence, there is no reason to consider a capital add-on for South African banks as yet. Despite the overall reliability of the credit gap, concerns remain on its reliability under certain circumstances. / Economics / M. Com. (Economics)