The Challenges of Basel III application in Banking Systems

Abstract

The global financial crisis has led the Arab banking systems to adopt international standards, imposed by rapid changes in the banking industry. Although the complexities of Basel II decisions did not allow many countries to implement them, they found themselves obliged to implement much more complex convention, called the Basel III Convention. This study aimed to analyze the challenges of the application of new decisions in the banking systems and their effects on the global economy and finance. The study found that the application of Basel III marked by several challenges and effects, whether to the nature of the models themselves, liquidity or transitional period. In addition, the study concluded that the regulatory authorities should prepare well before implementing the new decisions in order to avoid new crises and their huge implications for the financial and global economy.