The Portuguese Banking System and Capital Agreements (2005-2011)

Margarida Filipe, Rita Martins de Sousa
International Journal of Finance, Insurance and Risk Management, Volume 3, Issue 4, 626, 2013
DOI: 10.35808/ijfirm/85

Abstract:

Basel III is set to come into force on 1 January 2014. This capital agreement will include the three pillars enshrined in Basel II and is designed to strengthen regulation and the microprudential supervision of each bank, while also adding the macroprudential dimension (system-wide risks). The purpose of this article is to analyse to what extent banking institutions of Portuguese origin, operating within the national banking sector, have implemented and observed the measures imposed by the Capital Agreements prior to Basel III. Our main results made it possible to identify three different groups of banks as far as the disclosure of information and the application of the risk measurement methods of Basel I and Basel II are concerned. An international comparison also allowed us to conclude that there has been a convergence of Portuguese and Spanish banking institutions in relation to some economic and financial indicators. However, as far as supervision is concerned, Portugal is to be numbered among the countries with more positive results, while Spain displays some weaknesses.


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