# Basel II & Basel III Frameworks – Learning Roadmap

The principal message of the Basel II framework is Capital Adequacy. Basel II signaled a move away from a purely static regulator driven capital adequacy measure to an internal and relatively invasive assessment of the capital profile of a bank, called the Internal Capital Adequacy Assessment Process (ICAAP).

Under ICAAP requirements a bank needs to have in place internal procedures and processes to ensure that it possesses adequate capital resources in the long term to cover all of its material risks and the board is kept cognizant of any expected or projected capital shortfall.

Basel III introduces significant reforms to the Basel II networks primarily by setting out the supervisory framework for liquidity risk measurement via two minimum funding liquidity standards.

# What are the prerequisites?

### History behind the current capital adequacy requirement framework

To understand the current capital adequacy requirement framework we begin with an overview of the historical back ground behind the development of Basel II:

- Basel II – Background: Great Depression, Regulation Q, Basel I
- Basel II

# What topics are covered?

### Basel II and ICAAP

The following courses then address Pillar 2 of the Basel II framework- the Internal Capital Adequacy Assessment Process (ICAAP):

- Internal Capital Adequacy Assessment Process (ICAAP) – Overview and Core concepts
- ICAAP Sample Report Template

### Basel III

Basel III is due to be fully implemented by 2019 and represents reforms to and strengthening of the existing capital requirement and liquidity standards. The following courses in turn review the revisions to the Basel II framework that Basel III encompasses as well as a detailed review of the liquidity reforms.

- Basel III- Basel II framework revisions
- Basel III- Liquidity Framework – Reforms to the Global Liquidity Risk Regulations
- Basel III enhancement- Linking liquidity crisis with Liquidity Coverage Ratio and Stable Funding Ratios

# What are the additional topics I can read up on?

Other courses related to Basel II, ICAAP and Basel III are:

- Collateral Valuation in Credit Risk Management
- Asset Liability Management
- Liquidity Risk Management Case Studies
- Setting Counterparty Limits, Market Risk Limits & Liquidity and Interest Rate Risk Limits
- Calculating Value at Risk
- Value at Risk Case Study
- Duration and Convexity Example

**Related Video Courses**

- Quant Crash Course
- Calculating VaR (Value at Risk) using VCV and Historical Simulation
- Setting Value at Risk (VaR), Stop Loss, Pre Settlement (PSR) and Counterparty Limits

**Related PDF Files**

- ICAAP – Overview & Core Concepts
- Calculating VaR – includes case study
- Collateral Valuation in Credit Risk Management
- ALM – Crash Course
- Setting Counterparty Limits

**Related EXCEL Files**

- ALM Crash Course – EXCEL Example (Examples include: Cost to close liquidity gaps, Cost to close interest rate risk, Earnings at risk, Market value of equity)
- Setting Limits
- ICAAP – Credit EXCEL Example
- Calculating VaR – EXCEL Example
- Duration Convexity Example

## Search the site

## Pages

- Self Study
- Learning Roadmaps
- Asset Liability Management – Learning Roadmap
- Basel II & Basel III Frameworks – Learning Roadmap
- Commodities – Learning Roadmap
- Corporate Finance – Learning Roadmap
- Derivatives Pricing – Learning Roadmap
- ICAAP (Internal Capital Adequacy), Stress Testing and Credit Risk – Learning Roadmap
- Internal Capital Adequacy Assessment Process (ICAAP) – Learning Roadmap
- Monte Carlo Simulation – Learning Roadmap
- Setting Market Risk Limits – Learning Roadmap
- Treasury Products and Operations – Learning Roadmap
- VaR (Value at Risk) – Learning Roadmap

- Topic Guides
- Asset Liability Management (ALM) Crash Course – Topic Guide
- Basel & ICAAP – Topic Guide
- Black Derman Toy (BDT) Interest Rate Model – Topic Guide
- Calculating Value at Risk (VaR) – Topic Guide
- Credit Analysis & Credit Process – Topic Guide
- Derivative Pricing – Topic Guide
- Derivative Products – Topic Guide
- Forward Rates and Forward Prices – Topic Guide
- Heath Jarrow Merton (HJM) Interest Rate Model – Topic Guide
- Interest Rate Simulation Crash Course – Topic Guide
- Monte Carlo Simulation – Topic Guide
- Pricing Interest Rate Swaps & Interest Rate Options – Topic Guide
- Setting Counterparty Limits – Topic Guide
- Treasury Crash Course – Topic Guide

- Video Courses
- ALM and Capital Adequacy – Course Outline
- Calculating VaR ( Value at Risk) – Course Outline
- Cross Selling Treasury Products – Course Outline
- Option Pricing using Binomial Trees – Course Outline
- Option Pricing using Monte Carlo Simulation – Course Outline
- Quant Crash Course – Course Outline
- Selling Derivatives Products – Course Outline
- Setting Value at Risk, Stop Loss, Pre Settlement and Counterparty Limits – Course Outline
- Stress Testing – Course Outline
- Understanding N(d1) and N(d2) – Course Outline
- Pitching for Startups – Course Outline

- Learning Roadmaps
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