Adoption of Basel norms: a review of empirical evidences

Abstract

Purpose

The purpose of this paper is to examine diverse literature available worldwide on the Basel norms readiness and risk management by thoroughly analyzing the empirical studies of past 13 years, i.e. from 2001 to 2013.

Design/methodology/approach

A qualitative approach has been used to analyze and compare the main findings as well as applicability of the research papers. Hence, by using an interpretive and critical approach through content analysis of the studies reviewed, the important measures, i.e. objectives, research methodology, sample size, respondents’ profile and significant findings, have been reported.

Findings

The study attempted to understand the trend of various research aspects prevailing in the field of banking industry related to the implementation of Basel norms. The content analysis of the reviewed studies demonstrated varied level of preparedness of banks in different countries, at different periods with regard to Basel norms. However, over time, awareness and compliance with Basel norms have increased in almost every part of the world. These studies also highlighted the benefits of Basel norm compliance by banks, such as more proactive portfolio management, forward-looking risk management, improved operational efficiency and better risk appetite. Further, data acquisition, data reporting, lack of prerequisite human resources, training and education, scarce resources and disclosure requirements were reported to be major challenges by most of the studies.

Originality/value

As there are relatively few studies providing a comprehensive review of literature in this area, this study builds up a strong conceptual framework for the researchers by examining the vast literature on Basel norms and risk management in banks.

Citation

Kaur, M. and Kapoor, S. (2015), "Adoption of Basel norms: a review of empirical evidences", Journal of Financial Regulation and Compliance, Vol. 23 No. 3, pp. 271-284. https://doi.org/10.1108/JFRC-02-2014-0010