Question

How successful will Basel III be in averting future financial crisis?   

Answer 1

Answer-

The Basel III norms have in place many new capital, leverage and liquidity standards that will strengthen the regulation, supervision and risk management of the banking sector.
Under Basel III the new capital buffers and standards will make it mandatory for bank to hold more capital and higher quality of capital than the Basel II norms.
The new risk based capital requirements is being enhanced by new leverage ratio and non risk based measure.
To overcome crisis the new liquidity ratios are in place to meet adequate funding.

The above measures to strengthen the banking system will enhance and maintain the financial health of the banks.
All these regulations will help in mitigating  risk within the international banking sector, by requiring banks to maintain proper leverage ratios and keep certain levels of reserve capital on hand to avert crisis.