Point of BASEL 1 BASEL 2 BASEL 3

Differences
Main Objective Basel 1 was formed with Basel 2 was Focus of Basel 3 was to
the main objective of established to specify an additional buffer
enumerating a minimum introduce supervisory of equity to be maintained
capital requirement for responsibilities and to by banks.
banks. further strengthen the
minimum capital
requirement.
Risk Focus Basel 1 has the minimal Basel 2 introduced a 3 Assessment of liquidity
risk focus out of the 3 pillar approach to risk risk in addition to the risks
accords. management. set out in Basel 2 was
introduced by Basel 3.
Risks Only Market and credit Basel 2 includes a Basel 3 includes liquidity
Considered risk are considered in wide range of risks risks in addition to the
Basel 1. including operational, risks introduced by Basel
strategic and 2.
reputational risks.
Predictability of Basel 1 is backward- Basel 2 is forward- Basel 3 is forward looking
Future Risks looking as it only looking compared to as macroeconomic
considered the assets in Basel 1 since environmental factors are
the current portfolio of the capital calculation considered in addition to
banks. is risk-sensitive. the individual bank
criteria.
Top Features Minimum level of 3 Pillars: Liquidity and leverage
capital is based on 1.Minimum capital management:
Single Risk Weight for requirements 1.Liquidity coverage ratio
each of a limited number 2.Supervisory review 2.Net stable funding ratio
asset classes. process 3. Leverage Ratio.
3. Disclosure and
Market discipline.
Summary Increased the overall Aims to redistribute Has a target to increase the
level of capital of capital with the government bond share in
financial market. overall capital the banks in capital and
maintained at the solve their liquidity
same level on an problems.
average, but with a
more efficient
allocation of capital.
 Assignment On
Comparisons of Basel 1, 2 and 3

Prepared For
Md. Alamgir Hossen
Assistant Professor
Course Instructor
Bank Management, Fin-303

Prepared By
Asrafuzzaman
ID 1907
BBA 25th Batch

Institute of Business Administration

Jahangrinagar University

Date of Submission
9th May, 2018