Abstract:

The introduction of the Basel system, through the implementation of Basel I, Basel II and of the current Basel III Accord, represents an extremely important research subject, widely discussed, with many opinions pros and against regarding its application. As shown by the global financial crisis, the revision of Basel II was necessary in order to reflect the current trends on the global financial markets. The purpose of this article is to analyse the impact of the Basel III introduction within the banking system of Romania. The new regulatory proposals established within the Basel III Accord will not affect the Romanian banks in a significant manner because they already report high equity ratios and sufficient cash flow. However, some negative effects should be expected. In this article, we will present the effects of applying the measures proposed by Basel III and their impact on the Romanian banking sector. One of the most important direct effects refers to the newly-introduced liquidity requirements as well as to the higher equity ratio requirements for counterparty risk. The indirect impact includes a reduced profitability of small banks due to a slow growth of the Romanian economy and to the unpredictable reaction of foreign parent banks which own a large majority of the banks operating in Romania.