Following the financial crisis of 2008 – 2009, the Basel Committee on Banking Supervision (BCBS) extensively revised the existing capital adequacy guidelines. The resulting capital adequacy framework is called Basel III. In a document published by KPMG entitled Basel III: Issues and Implications, the Basel III proposal had two main objectives: • Strengthen global capital and liquidity regulations with the aim of promoting a more resilient banking sector • Improve the capacity of the banking sector to absorb shocks arising from financial and economic stress, which, in turn, would reduce the risk of spillovers from the financial sector to the real economy. The KPMG article further argues that the Basel Three proposals are divided into three main parts to represent the main areas of focus. (pillars). These are capital reform, liquidity reform and other elements related to the general improvement of the stability of the financial system. The area focused on capital reforms includes capital quantity and quality, comprehensive risk hedging, leverage ratio, and provision of both capital conservation and countercyclical buffer. Liquidity reforms encompass both capital and short-term ratios while other elements address systemic risk and interdependence. . Under this pillar, areas of concern include capital incentives for the use of central counterparties for OTC transactions, increased capital for systemic derivatives and inter-financial exposures. Conditional capital and capital supplements for systemic banks are also part of this pillar. As part of the ninth high-level meeting for the Middle East and North Africa region, jointly organized by the Basel Committee on Banking Supervision, the Financial Stability Institute and the Arab Monetary Fund (AMF ). ) in Abu Dhabi, United Arab Emirates...... middle of paper ......companies, which effectively required flash sales of assets, exacerbated the fall. » Schwarcz (2010) raises an important point that deserves further discussion. . He notes that although governments have attempted to introduce measures to address systemic risk, the focus has tended to be on institutions and not markets. This is also supported by Schwerter (2011) who claims that with regard to systemic risk, the Basel III Committee has not provided adequate coverage in regulating systemic risk. He claims that the Basel III proposals have a major flaw, namely the absence of pricing of systemic risk. It notes that "the committee's proposal that systemically important banks should implement loss absorption capacity beyond the norm through a combination of capital supplements, contingent capital and debt bailouts debt, this absolutely obligatory obligation is not dealt with. THE