International Banking Law and Capital Markets Assignment

International Banking Law and Capital Markets - Assignment Example There is a need to develop more stringent standards for the banks to address the deficiencies that come on the surface in the financial crises of late 2000. The introduction of Basel-111 aims at to strengthen the capital requirements of the bank and the regulatory requirement of bank liquidity and bank leverage. In Basel II, the risk management was out sourced to third party. The Ratings of financial instruments were conducted by the outsource agencies Fitch ibca, moody and poor and standard without intervention of official agencies. The AAA ratings on  mortgage backed securities,  credit default swaps  and other instruments in practice evidencing extremely bad credit risks. The implementation of Basel III surely will decrease annual GDP growth to the extent of 0.05 to 0.15 percentages. It is responsibility of the directors of the company to keep an eye on  market liquidity  condition that enables them to hold major assets for the accountability of material losses2. Require ment of Basel III The Basel III primarily addresses and focuses on the liquidity risk, capital adequacy ratios and stress testing. It requires banks to follow the requirement of Basel III and to compute the liquidity and leverage ratios accordingly. Therefore, the banks are to keep themselves align with the new requirement in order to integrate all relevant data to develop a new approach of data analysis and modeling. Basel III demands sufficient transparency and zero rated documentation ever than before to ensure that the deployment of funds would bear fruits3. Banks must ensure creation of new models that ensure compliance of Basel III requirement. It is a matter of fact that most of the institutions are reluctant to implement it in its true spirit due to reasons best known to them. However, they have no other option but to implement it in order to avoid penalty from compliance and monitoring watch dogs. In other words, compliance of Basel III requirement is mandatory and not opti onal. Keeping in mind the necessity, the banks are developing infrastructure and models for the banks to make best use of its capacity to pin point and respond to the profit making opportunities4. According to Simon Nixon, â€Å"no one disputes the broad thrust of Basel III, that banks should hold much higher levels of higher-quality capital. Indeed, all major European banks have well-developed plans to meet the new rules ahead of time.†5 It is a matter of fact that in today’s world each and every organization including banks heavily relies upon latest technology to meet the requirement of customer satisfaction besides regulatory compliance by the banks. The more efficient business decision making are based on the reliability of their quality data. Any bank who successfully receives the data through reliable domestic sources within the bank to position its data warehouse on sound footings coupled with technology infrastructure stands to deliver the goods efficiently in terms of compliance and better business6. â€Å"Basel III tightened up the rules on what could be counted as core capital, increased the risk-weights that determined how much capital a bank should hold against a particular exposure and finally introduced a tough new minimum ratio of core capital to risk-weighted assets, set at 7% for small banks and rising to 9.5% for the largest banks deemed

Strategic Management Case Study Example | Topics and Well Written Essays - 4500 words

Strategic Management - Case Study Example Inaugurated in 1999, the company’s 16 years of existence has proved remarkably beneficial in the global energy mix, crafting ultra-modern ideas that have contributed to resolving present day energy needs such as supply reliability, fuel cost volatility and overall conserving the earths scarce natural resources and fossil fuels with its exclusive cadmium telluride (CdTe) film technology, successfully achieving the undermost leveled cost of electricity (LCOE) in the entire industry. They also extraordinarily lowered manufacturing costs to the bare minimum i.e. less than a dollar per watt, another record breaker, and a new goal limit set for capital efficiency. (Citation, year) This success, although seen to only further excel, faced new rivalries in 2011, hence leading to the gradual decline of their electric empire in the solar module industry. Specializing in the production of crystal silicon (c-Si), these emergent companies such as Trina, Yingli and Suntech raced to not only reach but overcome these newly set standards, rapidly reducing overall manufacturing costs and increasing output. In 2013, Suntech replaced First Solar acclaiming the number one position of modules worldwide. Several strategic issues had surfaced due to which First Solar led to its downfall. Of the two major reasons, the first is that these new entrants began selling crystalline-silicon solar panels for less than a dollar, creating a price clash. Secondly, the silicon solar panels proved more efficient than the thin-filmed cadmium-telluride solar panels hence consumers preferred the newer products over theirs as they were getting better quality and reliability for the same price. Although a major part of their profits were accumulated from their solar power plants and installation, these low budgeted and better quality Chinese panels forced