LCR ratio and NSFR ratio in Basel III

Abstract

Basel III was introduced in the case of global financial crisis (2007-2010) in order to overcome the drawback of Basel II. Particularly, it focuses on liquidity management, capital requirements (core1) and leverage ratio in banking system. In liquidity management, compared to Basel II, Basel III added LCR ratio, NSFR ratio and the implementation of these ratios in commercial banks. This paper is going to analysis LCR and NSFR in Basel III