Regulatory Reforms around Capital Requirements

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A look at evolving regulations for capital requirements and the business and technology implications for global financial services institutions

After the endorsement of new Basel III norms at the G20 summit in Seoul, regulatory reforms are largely complete except for the upcoming treatment of systemic institutions. Capital and funding are the key focus areas of Basel III as regulators believe that improving the quality of capital will drive banks to improve their underlying risk-management. New capital requirements and other regulations are expected to change the structure and dynamics of the financial services industry. It is believed that the tougher regulations, if implemented properly, will reduce the chances of another systemic failure in the long run but may adversely affect the profitability of the banking sector in the short-term. Financial institutions should redefine their business strategy in the wake of current and evolving regulatory environment, along with exploring new avenues for profit generation and long-term sustainability.

This paper is part of Capgemini’s What You Need to Know series dedicated to Financial Services Regulations.