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Adapting to Change: The Evolution of the Basel Accords and the Chinese Banking Sector's Response
- 1 BanBank of Huzhou, Hongqi Road, Huzhou, Zhejiang Province, Chinak of Huzhou
- 2 The University of Sheffield, United Kingdom
* Author to whom correspondence should be addressed.
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
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[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
Cite this article
Si,Y.;Tang,Z. (2024). Adapting to Change: The Evolution of the Basel Accords and the Chinese Banking Sector's Response. Advances in Economics, Management and Political Sciences,78,91-98.
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Volume title: Proceedings of the 3rd International Conference on Business and Policy Studies
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