Basel III/IV Framework: Capital Adequacy and Liquidity Standards

Banking, Insurance and Financial Services October 25, 2025
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Introduction

This comprehensive course provides detailed coverage of the Basel III/IV regulatory framework, focusing on capital adequacy requirements, liquidity standards, and leverage ratios that govern international banking operations. Participants will learn about the evolution of Basel standards, the calculation methodologies for various capital and liquidity ratios, and the implementation challenges faced by financial institutions. The curriculum covers Pillar 1 minimum capital requirements, Pillar 2 supervisory review processes, and Pillar 3 market discipline disclosures. Through practical exercises and case studies, learners will develop the expertise to navigate complex regulatory requirements and ensure their institutions maintain compliance with international banking standards.

Objectives

Upon completion of this course, participants will be able to:

  • Understand the Basel III/IV framework and its components
  • Calculate capital adequacy ratios and requirements
  • Implement liquidity coverage ratio and net stable funding ratio
  • Navigate Pillar 2 and Pillar 3 requirements
  • Develop internal capital adequacy assessment processes
  • Manage leverage ratio compliance
  • Implement stress testing frameworks
  • Navigate jurisdictional implementation variations
  • Prepare for regulatory examinations

Target Audience

  • Regulatory Compliance Officers
  • Risk Management Professionals
  • Capital Management Staff
  • Treasury Professionals
  • Banking Executives
  • Internal Auditors
  • Financial Controllers
  • Regulatory Reporting Staff

Methodology

  • Capital ratio calculation exercises
  • Liquidity assessment case studies
  • ICAAP development workshops
  • Regulatory reporting exercises
  • Stress testing simulations
  • Compliance scenario analysis

Personal Impact

  • Enhanced regulatory knowledge
  • Improved capital management skills
  • Stronger risk assessment capabilities
  • Better compliance understanding
  • Enhanced analytical abilities

Organizational Impact

  • Improved regulatory compliance
  • Enhanced capital efficiency
  • Better risk management
  • Reduced regulatory penalties
  • Increased stakeholder confidence

Course Outline

Unit 1: Basel Framework Overview

Evolution and Structure
  • History of Basel accords development
  • Basel III/IV key components and timeline
  • Pillar 1, 2, and 3 framework
  • Global implementation status

Unit 2: Capital Adequacy Requirements

Capital Components
  • Common Equity Tier 1 requirements
  • Additional Tier 1 capital instruments
  • Tier 2 capital elements
  • Capital conservation buffer
Risk-Weighted Assets
  • Credit risk calculation approaches
  • Market risk capital requirements
  • Operational risk frameworks
  • Counterparty credit risk

Unit 3: Liquidity Standards

Liquidity Coverage Ratio
  • LCR calculation methodology
  • High-quality liquid assets definition
  • Net cash outflows calculation
  • Stress scenario assumptions
    • Net Stable Funding Ratio
    • NSFR calculation approach
    • Available stable funding components
    • Required stable funding factors
    • Implementation challenges

    Unit 4: Leverage and Buffers

    Leverage Ratio
    • Leverage ratio calculation
    • Exposure measure components
    • Supplementary leverage ratio
    • Global systemically important banks
    Capital Buffers
    • Capital conservation buffer
    • Countercyclical capital buffer
    • Systemic risk buffer
    • Buffer utilization restrictions

    Unit 5: Pillar 2 Requirements

    ICAAP Process
    • Internal Capital Adequacy Assessment
    • Risk management framework
    • Stress testing methodologies
    • Capital planning processes
    Supervisory Review
    • Supervisory assessment methodologies
    • Pillar 2 capital guidance
    • Remedial action requirements
    • Supervisory dialogue management

    Unit 6: Pillar 3 Disclosures

    Disclosure Requirements
    • Pillar 3 disclosure framework
    • Risk management disclosures
    • Capital adequacy disclosure
    • Remuneration disclosure requirements
    Implementation Challenges
    • Data quality requirements
    • Reporting system capabilities
    • Comparability and consistency
    • Market discipline effectiveness

    Unit 7: Implementation and Compliance

    Program Management
    • Implementation planning strategies
    • Change management approaches
    • Stakeholder engagement
    • Regulatory relationship management
    Future Developments
    • Basel IV finalization impacts
    • Digital asset considerations
    • Climate risk integration
    • Regulatory evolution trends

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