Citation:

Nanang Shonhadji, Ali Soebijanto, Ervan Pranata Panca, Farah Hikma. "Role of BASEL III: Impact of Liquidity Coverage, Net Stable Funding, Leverage and Cost of Fund to Financial Performance" International Research Journal of Economics and Management Studies, Vol. 2, No. 1, pp. 306-313, 2023.

Abstract:

The difficulties that practically all nations are having with Basel III readiness go beyond simple comprehension and knowledge. Fund risk and liquidity risk are associated in a Basel III phenomena. Basel III is a modification of Basel II that includes measures to stop a banking crisis from happening. All banks must meet this ratio's requirements under the new Basel III if they engage in international banking operations. This study intends to examine how leverage, net stable funding ratio, liquidity coverage ratio, and cost of funds impact return on assets. The subjects of this study were banking institutions in Singapore, Malaysia, and Indonesia. Purposive sampling was used in the sampling process, and multiple regression analysis was performed to analyse the data. The findings of this study indicate that while net stable funding ratio and cost of fund variables have substantial effects on return on asset, liquidity coverage ratio and leverage have no significant influence.

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Keywords:

BASEL III; Liquidity Coverage; Net Stable Funding; Leverage and Cost of Fund.