FINANCIAL SECURITY OF THE BANKING SYSTEM THROUGH THE IMPLEMENTATION OF BASEL III AGREEMENT

Mihail GÎRLEA Universitatea de Stat din Moldova

Abstract

Basel III represents a basic revision of the banking industry regulatory and supervisory framework for the future, the objective being the stability consolidation of the financial system. The objective of this article is to analyze the impact of the Basel III implementation upon the banking system at the European level, and respectively, upon the banking system of the Republic of Moldova. Basel III standards have been elaborated as a response of the 2008 financial crisis and are considered as vital for the assurance of financial institution capitalization against future financial shocks. The new standards have as an object the improvement of risk management, increased requirements of transparency and publication of credit institutions, as well as solving the banks problems of systemical importance. The measures that the credit institutions could adopt in order to mitigate the impact of alignment to the new standards are adjusting the business model and restructuring bank balance sheets. Keywords: financial security, financial crisis, banking system, Basel committee on Banking Supervision, Prudential requirements, risk management, credit risk, market risk, operational risk, liquidity risk, internal rating etc.