Bob and Amy discuss the Basel III regulatory framework for banks. Basel III specifies rules for capital adequacy, including definitions of different capital tiers and their required amounts, and details how to calculate risk-weighted assets for various credit, market, and operational risks.
The framework addresses the scope of application, the treatment of systemically important banks (G-SIBs and D-SIBs), and includes specific guidance on securitization, counterparty credit risk, and market risk, encompassing standardized and internal model approaches.
It also covers aspects like credit risk mitigation, collateral, and the operational risk framework, aiming to enhance the resilience of the global banking system.
