Banking Essay Example | Topics and Well Written Essays - 3750 words

Banking - Essay Example Not only the internal rating, but also the governance and the quality of risk management will be a major factor in being able to use internal ratings as a basis for calculating regulatory capital requirements. National supervisors will authorise firms to use one of the internal-ratings based approaches on a case by case basis. Basel II also introduces capital requirements for operational risk, a risk category that was not explicitly addressed under the Basel I rules. To a large extent, the proposed Basel II was in response to widespread criticism of Basel I. But it also reflected additional thought and analysis of the role of bank capital regulation. In particular, Basel II added two new "pillars" - supervisory review (pillar 2) and market discipline (pillar 3) - to the single pillar of minimum capital requirement of Basel I. In response to public comments, the Committee revised its proposal twice and issued a third consultative paper (CP3) in early 2003. If approved, the proposed standards are scheduled for implementation in most countries at the beginning of 2007. In preparation, in August 2003, U.S. regulators circulated an Advance Notice of Proposed Rulemaking (ANPR) for the application of Basel II to U.S. banks for public comment by the end of the year, and the major features have been incorporated by the European Union in a proposed revision of its Capital Adequacy Directive (CAD) for financial institutions, for approval by the European Pa rliament and the member national parliaments before adoption A key feature of the New Accord, as noted above, is that it is structured on the basis of three pillars: (1) Pillar 1. Minimum capital requirements for market credit and operational risk (2) Pillar 2. Supervisory review process and (3) Pillar 3. Market discipline These pillars are interlocking and mutually reinforcing. For example, the use of the more sophisticated approaches to credit or operational risk will bring additional disclosure requirements under Pillar 3, and will affect the nature of the supervisory review conducted under Pillar 2.Pillar 1 - Minimum capital requirements Under Basel II, the definition of regulatory capital as well as the minimum required ratio of 8% of risk-weighted assets remains substantially unchanged from the Basel I Accord2. The treatment of position risk arising from trading activities as set out in the 1996 Amendment of Basel I Accord also remains substantially un-changed, although significant changes are proposed to the treatment of counterparty credit risk that have been discussed in a joint working group established by the Basel Committee and the International Organisation of Securities Commissions (IOSCO). The principal modifications relate to the methodology for calculating risk-weighted assets categories, credit and operational risk. The minimum capital requirements and methods used to measure the risks faced by banks, as defined under Pillar 1 of the Basel II Ac-cord, are given in the paragraphs below. Credit Risk: Pillar 1 Three methods for calculating credit risk capital are offered. In order of increasing sophistication and risk

Customers' attitude towards online banking services in the UK Dissertation

Customers' attitude towards online banking services in the UK - Dissertation Example Therefore, this study aims to evaluate the factors that are responsible to make certain attitude of the consumers towards using internet banking services in the UK. This research considers two banking institutions: Lloyds Bank and Barclays Bank, and two non-banking financial institutions: Tesco and Virgin. All these institutes are UK based, and internet services provided by these institutes, studied to determine the attitude of the customers for their services. The approach selected to conduct this research is quantitative approach that is based on positivistic paradigm. The result revealed that the attitude of the customers of UK is positive towards the internet services provided by banking and non-banking institutions. ... ble 1: Frequency Tables – Barclays Bank 45 Table 2: Descriptive Statistics for Dependent Variable - Barclays Bank 47 Table 3: Descriptive Statistics for Independent Variables - Barclays Bank 49 Table 4: Frequency Tables – Lloyds Bank 511 Table 5: Descriptive Statistics for Dependent Variable - Lloyds Bank 52 Table 6: Descriptive Statistics for Independent Variables - Lloyds Bank 53 Table 7: Frequency Table - Tesco 55 Table 8: Descriptive Statistics for Dependent Variable - Tesco 57 Table 9: Descriptive Statistics for Independent Variables - Tesco 58 Table 10: Frequency Table - Virgin 60 Table 11: Descriptive Statistics for Dependent Variable - Virgin 60 Table 12: Descriptive Statistics for Independent Variables - Virgin 61 Table 13: Regression - Banking 64 Table 14: Regression – Non-Banking Financial Institutions 65 Table 15: Independent Samples Test 67 Chapter 1 - Introduction 1.1. Background In the retail banking services, online banking is relatively new phase and still many people are not properly aware of the offerings of online banking (Peevers, et al. 2011). There are different services that online banking offers to the customers so that they can perform their transactions and can request for the information of their accounts. This includes the â€Å"inquiry of balance, transfer of accounts, payment of bills, ATM card pin code†, and many other services that the banks are offering (Aladwani 2001). The successful key for developing economies is information, and most of the companies are thinking of switching their businesses from physical to online technology (Akinci et al., 2004). There are many factors responsible to influence the preference of the customers in terms of the online banking, and it is very important for the banks to understand these factors