ABSTRACT
This chapter provides an overview of the content of Basel III, and explores at an early stage some of its potential impact, both in general and on project finance in particular. In December 2010, the Basel Committee on Banking Supervision published its report Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems. Expressly set out as a response to the global financial crisis, the Basel III framework represents a substantial step forward from its predecessor regime, Basel II. The financial crisis was widely seen as exposing a number of weaknesses in the existing global regulatory framework, as embodied in the Basel II regime. In the short term, the liquidity coverage ratio (LCR) requires that banks have sufficient high quality liquid assets available to enable them to meet anticipated outflows over a 30-day period of acute stress. The net stable funding requirement (NSFR) requires banks to demonstrate stable funding over the longer term.
