{"product_id":"from-basel-ii-to-basel-iii-would-investment-banking-be-preferred-under-basel-ii-von-malte-vieth","title":"From Basel II to Basel III. Would Investment Banking be preferred under Basel II?","description":"\u003cp\u003eMaster's Thesis from the year 2013 in the subject Economics - Finance, grade: 1,7, Johannes Gutenberg University Mainz, language: English, abstract: In the year 2007 the first bad signs appeared which predicted that something is happening in\u003c\/p\u003e\u003cp\u003eglobal financial markets. An asset-bubble in the US housing market started to bust and that\u003c\/p\u003e\u003cp\u003eevent had generated fatal consequences not only for the US, but also for the rest of the world.\u003c\/p\u003e\u003cp\u003eSeveral major peaks characterize the recent financial crisis, also named subprime crisis, such\u003c\/p\u003e\u003cp\u003eas the country default of Iceland (though subprime crisis was not the main cause) or the\u003c\/p\u003e\u003cp\u003enationalization of the mortgage corporations Freddie Mac and Fannie Mae by the US\u003c\/p\u003e\u003cp\u003egovernment. Certainly, no one forgets the queues of people waiting outside the branches of\u003c\/p\u003e\u003cp\u003ethe British bank Northern Rock to withdraw their savings from the bank as a result of rumors\u003c\/p\u003e\u003cp\u003eabout liquidity problems of this institution. Some of the biggest Investment Banks in the\u003c\/p\u003e\u003cp\u003eworld experienced serious difficulties with reference to their liquidity situation and were\u003c\/p\u003e\u003cp\u003eacquired by other banks. JPMorgan Chase bought the traditional US Investment Bank Bear\u003c\/p\u003e\u003cp\u003eStearns and Bank of America merged with the US Investment Bank Merrill Lynch. Clearly,\u003c\/p\u003e\u003cp\u003eone of the most important events in the course of the subprime crisis was the collapse of the\u003c\/p\u003e\u003cp\u003eUS Investment Bank Lehman Brothers which happened on 15th September 2008.\u003c\/p\u003e\u003cp\u003eEspecially Investment Banks were hit hard by the subprime crisis and also the Investment\u003c\/p\u003e\u003cp\u003eBanking divisions of universal banks caused many issues for the whole institution. One of the\u003c\/p\u003e\u003cp\u003emain causes of the subprime crisis was identified: the Investment Banking business. The\u003c\/p\u003e\u003cp\u003eregulatory framework with reference to the banking supervisory failed in times of financial\u003c\/p\u003e\u003cp\u003eturmoil and needed to be reformed. In particular, the capital situation and liquidity profile of\u003c\/p\u003e\u003cp\u003emany banks were not adequate compared to the risks these banks were exposed to. Risks\u003c\/p\u003e\u003cp\u003eresulting from positions in the trading book (market-to-market) and risks resulting from offbalance\u003c\/p\u003e\u003cp\u003esheet items which were not monitored by supervisory authorities needed to be\u003c\/p\u003e\u003cp\u003eemphasized. When the crisis hit, the capital requirements on the banking book were\u003c\/p\u003e\u003cp\u003esufficiently deep to safeguard banks. The capital requirements on the trading book, however,\u003c\/p\u003e\u003cp\u003ewere nowhere strong enough to absorb the losses (Dayal, 2011, p. 17). The new regulatory\u003c\/p\u003e\u003cp\u003eframework, namely Basel III, developed by the Basel Committee on Banking Supervisions\u003c\/p\u003e\u003cp\u003ewhich was finalized in 2011 focused on these risks.\u003c\/p\u003e\u003cdiv class=\"aw-variant-hidden-subtitle-div\" id=\"aw-variant-subtitle-9783656622734\"\u003e\u003ch3\u003e\u003c\/h3\u003e\u003c\/div\u003e","brand":"Libri","offers":[{"title":"Softcover - 9783656622734","offer_id":39433374269533,"sku":"9783656622734","price":27.95,"currency_code":"EUR","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0940\/0622\/files\/3d23f034-c529-4a6e-8a48-bdb17e0207bf.jpg?v=1778134544","url":"https:\/\/shop.autorenwelt.de\/en\/products\/from-basel-ii-to-basel-iii-would-investment-banking-be-preferred-under-basel-ii-von-malte-vieth","provider":"Autorenwelt Shop","version":"1.0","type":"link"}