Comprehensive Basel Bank Capital Adequacy Certification Training (Basel III and IV)

The training and capacity development programme is based on guidance issued by the Basel Committee on Banking Supervision (BCBS) for the implementation of Basel II, Basel III and the finalised Basel III reforms (commonly referred to as “Basel IV”) governing bank capital, leverage and liquidity requirements.

This hands-on training programme is structured in an easily digestible format to enable individuals with limited or no prior experience in risk management or regulatory reporting to acquire the foundational knowledge and practical skills required to perform effectively in Basel-related capital and risk regulatory reporting roles.

The programme ensures that participants gain both theoretical understanding and applied skills, preparing them to meet the demands of modern and evolving banking regulatory environments.

The course is structured around three key areas:

• 1. A comprehensive analysis of the Basel II, Basel III, and final Basel III reform frameworks, including key reforms, supervisory expectations and implementation guidance.
• 2. A detailed exploration of Credit Risk, Liquidity Risk and Operational Risk, focusing on regulatory methodologies, capital calculations and practical applications under the Basel Accords.
• 3. Practical exposure to tools such as Microsoft Excel and web-based risk engine simulators to support the calculation, analysis and interpretation of regulatory risk measures.

1. Introduction to Basel Regulations

1.1 Evolution of Basel Standards

• Basel I → Basel II → Basel 2.5 → Basel III → Basel III Final (2017 reforms)
• Why “Basel IV” is industry terminology, not an official BCBS standard
• Post-crisis reforms and global implementation variations



1.2 Three Pillars Framework (still applicable under Basel III Final)

• Pillar 1 – Minimum Capital Requirements
• Pillar 2 – Supervisory Review
• Pillar 3 – Market Discipline

2. Basel III Capital Framework (2025)

2.1 Composition of Regulatory Capital

• CET1, AT1, Tier 2
• Deductions and adjustments



2.2 Basel III Capital Ratios

• CET1 Ratio
• Tier 1 Ratio
• Total Capital Ratio



2.3 Capital Buffers

• Capital Conservation Buffer (CCB)
• Countercyclical Capital Buffer (CCyB)
• G-SIB & D-SIB Capital Surcharges



2.4 Macroprudential Reforms

• Systemic risk buffers (region-specific)
• Stress testing and P2R/P2G interaction

3. Liquidity Risk Framework

3.1 Liquidity Risk Concepts & 2008 Crisis Lessons

• Bank runs & liquidity spirals
• Role of short-term wholesale funding
• Interaction of leverage & liquidity risk



3.2 Regulatory Response

• Introduction of LCR and NSFR
• Intraday liquidity monitoring
• National discretions (EU/US/UK/SARB differences)

4. Liquidity Coverage Ratio (LCR)

4.1 What is LCR?

• 30-day liquidity stress measure



4.2 High-Quality Liquid Assets (HQLA)

• Level 1, Level 2A, Level 2B
• Haircuts & operational requirements



4.3 Derivation & Calculation of LCR

• Cash outflows & inflows
• LCR = HQLA / Net Cash Outflows



4.4 Implementation Overview (2025)

• Global consistency & regional variations

5. Net Stable Funding Ratio (NSFR)

5.1 Purpose & Objectives

• Structural long-term funding measure



5.2 Calculation Components

• Available Stable Funding (ASF)
• Required Stable Funding (RSF)



5.3 Global Implementation Status


6. Leverage Ratio (Basel III)

6.1 Role in the Basel Framework

• Backstop to RWA-based capital requirements
• Preventing excessive leverage



6.2 Exposure Measure Components

• Balance sheet exposures
• Off-balance sheet items
• Derivatives & SFTs



6.3 Global Implementation

• G-SIB Supplementary Leverage Ratio (SLR)
• EU/UK/SARB variations

7. Basel III Final (“Basel IV”) Overview

7.1 What Changed in 2017 Finalised Reforms

• Revised Standardised Approach (credit risk)
• Limits on internal models (IRB)
• Output Floor (72.5% of RWA)
• SMA for operational risk
• FRTB for market risk
• Leverage-ratio revisions



7.2 Implementation Timelines (2025 Status)

• EU: CRR III effective Jan 2025
• US: Basel III Endgame 2025–2028 phased
• UK: Basel 3.1 2025+
• SARB: phased adoption closely aligned with BCBS

8. Basel III Final - Credit Risk

8.1 Standardised Approach (Revised)

• Exposure class restructuring
• New risk-weighting methodology for:
• Corporates (ratings vs non-ratings based)
• Banks (“Categories” replacing mappings)
• Commercial real estate (income vs non-income based)
• Retail, SME, specialised lending
• Due-diligence requirements
• Credit Risk Mitigation (CRM) changes
• Collateral haircuts & eligibility rules



Exercises (Optional)

• STD RWA calculations
• Collateral + guarantee recognition
• Corporate borrower example



8.2 Internal Ratings-Based (IRB) Approach

• Removal of Advanced IRB for corporates, banks, financial institutions
• Floor minimums for PD, LGD, EAD
• Revised downturn LGD
• RWA variability reduction proposals



8.2.1 Foundation IRB (F-IRB)

• Components: PD (bank-estimated), LGD (prescribed), M, EAD
• Asset classes eligible for F-IRB as of 2025
• CRM under IRB



8.2.2 Advanced IRB (A-IRB)

• Still permitted for limited portfolios in certain jurisdictions



Exercises

• IRB PD/LGD calculations
• RWA comparison: STD vs IRB
• Impact of new parameter floors

9. Operational Risk - SMA (2025-Compliant)

9.1 What is Operational Risk?




9.2 SMA Components

• Business Indicator (BI)
• Business Indicator Component (BIC)
• Internal Loss Multiplier (ILM)
• Loss component



9.3 Regulatory Capital Calculation

• SMA formula
• Loss data requirements
• Impact on banks previously on AMA



Exercises

• SMA calculation on sample dataset

10. Output Floor (Capital Floor)

10.1 Purpose

• Limit IRB banks’ total RWA reduction



10.2 Calculation

• Total RWA ≥ 72.5% of Standardised Approach RWA



10.3 Transition Arrangements (2025 Status)

• EU multi-year phase-in
• US/UK similar but jurisdiction-specific

11. Market Risk - FRTB (2025)

11.1 Trading Book vs Banking Book Boundary




11.2 Standardised Approach (SA)

• Sensitivities-Based Method (Delta, Vega, Curvature)
• Default Risk Charge (DRC)
• Residual Risk Add-On (RRAO)



11.3 Internal Models Approach (IMA)

• Expected Shortfall (ES)
• Non-Modellable Risk Factors (NMRF)
• P&L Attribution (PLA) tests



11.4 Regional Implementation

• EU: reporting only until full capitalisation
• US/UK: staged implementation
• Emerging markets: varying timelines



Exercises

• SBM calculation examples
• DRC simple example

12. Market Risk - CIU (Funds) under CRR

12.1 CIU treatment under CRR (not FRTB)

• Look-through, mandate-based, fall-back approaches
• Article 323a–c (CRR III)

13. Market Risk - Equity (Legacy CRR Rules)

Note

• Legacy rules still applicable in some EU reporting templates

  14. Trade Finance & Working Capital Products
• RWA treatment under revised STD and IRB
• Updated off-balance sheet conversion factors
• CRM treatment for trade products
• Supply-chain finance considerations

15. Country-Specific Basel III Final Implementation

15.1 South Africa (SARB)

• Local adoption of Basel III reforms
• Domestic systemic buffers
• Liquidity requirements
• Model approval processes



15.2 U.S. – Basel III Endgame

• Standardised vs Expanded Risk-Based Approaches
• Revised credit, market, operational risk rules
• Implementation 2025–2028



15.3 EU – CRR III / CRD VI

• In force January 2025
• Output floor transition
• Restrictions on IRB



15.4 UK – Basel 3.1

• Implementation 2025 onwards
• UK-specific calibrations



15.5 Other Emerging Market Jurisdictions

• Phased adoption strategies
• National discretions

Who is this course for?

Anyone interested in learning more about the rules governing bank capital and liquidity should take the course. It is aimed at all level learners and presupposes a basic understanding of accounting, financial instruments, and banking operations.

It might be appropriate for:

• BAU/Operations team
• Regulatory Reporting Team
• Policy Team
• Audit and Compliance
• Finance team
• Credit Management Team

• This course is ideal for anyone seeking a comprehensive understanding of the rules governing bank capital and liquidity. It is designed for intermediate-level learners and assumes a foundational knowledge of accounting, financial instruments, and banking operations.
• The course is particularly suitable for professionals such as analysts, bankers, risk managers, regulators, internal auditors, and investors. It provides them with the necessary insights to navigate the complexities of bank capital adequacy and liquidity requirements effectively, supporting their career progression in the finance industry.

Certification and Exam

• 40 questions
• A Passing Score: 70% (28 out of 40 questions)
• Objective-type questions related to the training syllabus



The Exam:

• Completion certificate by Merit Global

Obtaining the Comprehensive Basel Capital Adequacy Certification is highly valuable for banking, finance, risk management and regulatory reporting professionals. This certification focuses on the Basel Committee on Banking Supervision (BCBS) frameworks - including Basel II, Basel III and the finalised Basel III reforms (often referred to as “Basel IV”) - which set global standards for bank capital adequacy, leverage and liquidity management. Participants gain both theoretical understanding and practical skills in regulatory capital requirements, risk‑weighted asset (RWA) calculations, capital buffers, leverage ratios and liquidity standards, equipping them to navigate complex regulatory environments and support compliance with evolving global guidelines.

From a career and compensation perspective, this certification often positions professionals for specialised and higher‑responsibility roles such as regulatory reporting analyst, capital adequacy specialist, prudential risk manager, compliance officer, and bank finance manager. Organisations value individuals who can confidently interpret Basel standards, perform capital and risk calculations, and support regulatory submissions because these skills are central to prudent capital planning, risk management and supervisory reporting. With strong demand for Basel expertise in banks, consulting firms and regulatory agencies, certified professionals may attract enhanced remuneration, broader job opportunities and stronger long‑term career growth compared to general finance roles.

Beyond salary and career benefits, the Comprehensive Basel Capital Adequacy Certification enhances professional credibility and demonstrates advanced competency in one of the most critical areas of banking regulation. It strengthens practical analytical skills, improves understanding of credit, liquidity and operational risk frameworks, and equips professionals to apply Basel principles through real‑world case studies and hands‑on tools such as Excel‑based calculators and risk simulators. By earning this certification, professionals position themselves as trusted experts capable of supporting accurate regulatory compliance, risk‑based decision‑making and strategic capital planning in an increasingly complex global financial landscape.

He is a seasoned banking risk and regulatory expert with extensive experience in capital adequacy frameworks and Basel regulatory standards. With a strong background advising financial institutions on risk‑based capital measurement, stress testing and regulatory compliance, he brings practical insights into aligning capital strategies with global requirements. Known for his engaging and clear teaching approach, he simplifies complex regulatory concepts and equips learners with actionable skills. His guidance helps professionals confidently apply Basel principles to strengthen capital planning and risk management practices.

This training is designed to: