The Impact of Announcement of Basel III on the Banking System Performance: An Empirical Research on Egypt Banking Sector

Abstract

Research purpose: this research aims at determining the effect of the announcement of Basel III on the equity valuation of Egyptian banks, as well as determines which are more affected by announcement of Basel III, the large banks or small banks. It also explain which are more affected by announcement of Basel III, the banks with more liquid assets on its balance sheet or the banks with less liquid assets on its balance sheet, the banks with higher capital rations or lower capital ratios, the banks with higher leverage ratio or lower leverage ratio, the announcement of Basel III, the banks with high profitable banks or low profitable banks, the banks with a higher book – to- market value of common equity or the banks with lower book- to-market equity. Research Importance: it gives a first impression of the impact of Basel III. It also contributes to the existing literature because this research examines the effect of capital and liquidity requirements on banks and not the macroeconomic impact. Finally, it contributes to the existing literature by investigating the effect of Basel III announcement between small – and large –size banks, high –and low-capitalized banks and low- liquid banks.