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A Five-Stage Process Banks Use to Optimize Capital Under the Basel Accords

Oct 15, 2013
From the Advisory Institute

 

Fix, Refine and Rebalance

Transactors, executives and the banking sector overall face critical decisions about their capital strategies.

To comply with Basel III guidelines, financial institutions must increase their capital, the nature and composition of which must be altered to:

  • Comply with the new mandates
  • Conform to leverage ratio requirements
  • Reduce their risk-weighted assets (RWA)
  • Make their accumulation of new risk more efficient.

Compliance will require careful examination of the strategy of the institution—in some cases prompting a rethinking of core elements of the organization’s franchise.

This paper describes strategies to reduce risk-weighted assets (RWA) in a manner that provides relief to capital and leverage requirements.

 

Read A Five-Stage Process Banks Use to Optimize Capital Under the Basel Accords

More from the KPMG Institutes on Basel III Compliance

 

Contact KPMG

Brian Hart
Principal, Advisory
bhart@kpmg.com