The Role of Capital Requirements on the Stability of Kosovo Banking Sector
The Role of Capital Requirements on the Stability of Kosovo Banking Sector

Summary/Abstract: After the failure of the Bretton Woods system, it was more than necessary to create a stable, acceptable and strong banking system. The way to achieve this was to form the Basel Committee on Banking Supervision. The committee has set a number of requirements that banks should fulfil in order to be a part of the banking sector. These rules have been adopted by many countries on an individual basis; one of the countries which has adopted the Basel regulations on banking supervision is Kosovo. Based on the committee’s regulation on capital adequacy, the Central Bank has created the Local Capital Regulation. The aim of this adoption is to completely integrate the Basel regulation in the near future. The major harmonisation was performed in 2012, when the new law on banking supervision was enforced. This paper provides us information on the impact of the new law requirements on capital adequacy ratios.

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