Impact Of BASEL II Implementation: A Case Study On Zambia

By Lyness Phiri – Mambo
February 2015
The Basel capital framework is the globally accepted capital adequacy standard. This paper investigates the impact of Basel II implementation on the financial sector in Zambia. The paper analyses the capital adequacy position of banks in Zambia before and after implementation of Basel II. Banks are put into three peer groups and an in-depth study of the impact of implementation of Basel II on each peer group is carried out. Secondly, the study reviewed developments, post the global financial crisis of 2007 in order to assess implications for the local banking sector and the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) member countries and develop a strategy for future adoption or implementation of the revisions made to the Basel Capital Accord under Basel 2.5 and Basel III where necessary. In this regard the study develops a living Dashboard highlighting the progress that MEFMI member countries have made in adopting the Basel capital frameworks, which will help the Institute to focus and tailor their capacity building initiatives accordingly.