THE CURRENT STAGE OF BASEL III APPLICATION AND ITS CONSEQUENCE ON FINANCIAL STABILITY: EVIDENCE FROM KOSOVO

Abstract

The study aims to explore the divergences around the implementation of the Basel III agreement, since this agreement is considered the core of the international regulatory response to the financial crisis, setting the strictest criteria for capital structure and risk assessment. This paper explains the current level of legislation that applies in Kosovo, as well as possible divergences with the criteria set by Basel III. It is argued that the national authority, explicitly the CBK, to decide on the implementation of Basel III, had to agree on three aspects and potentially conflicting between them: the stability of the banking sector, competition, and care for economic growth. And as a final argument of the study consists that Kosovo with increased effortlessness and attention is implementing the requirements of Basel III, and contributing to the stability of the banking sector, the level of competitiveness and, the promotion of economic growth.

Keywords

• Banking System
• Financial Regulation
• Capital
• Risk Assessment