THE IMPACT OF BASEL BANKING REGULATION ON FINANCIAL TRANSACTIONS

Abstract

In our research, we review Basel banking regulation because in our rushed lives, unfortunately, we don’t know much about it (even though we live in a world controlled by money). In our research, we aim to present in detail the centuries-old system of the banking system, the role of banks in the economy and society, and the need for banking regulation in the light of the operation of credit institutions. In our research, we review in detail the past of Basel banking regulation and examine its impact on the present. In our material, we have summarized in a separate section the most well-known forms of classification, which can be used in such an analysis due to their complexity. We also present the CAMELS method, which, unlike other methods of analysis, includes the classification of capital adequacy, assets, management, profitability, liquidity and sensitivity to market risks. In our research, we present the CAMELS analysis method (supported by indicators) through a specific example. The CAMELS method was developed in the United States in order to determine a bank’s capital adequacy. In addition, the method helps to determine the quality of assets, profitability and liquidity (it is also suitable for determining the sensitivity to market risk). Our aim through this research is to present both the advantages and disadvantages of the CAMELS method through the example of a reputable bank in the last 5 years. Officially available databases were used for the research.

Keywords

• Basel, Camels, analysis method, research