Importance The article considers the first results of implementing the Basel III International Regulatory Framework by the Russian banking sector under instability and increasing problems in the Russian financial sector. Objectives The aim is to study the implications of implementing the Basel III Accord by the Russian banking sector and to develop measures enabling to improve the banking regulation in Russia. Methods The research draws on a systems approach, comparative analysis, expert evaluations, and elements of quantitative statistical and correlation analysis. Results The paper focuses on the practical aspect. I identified the major problems related to the Basel III Accord implementation in Russia, formulated the areas for optimization of bank operations to comply with the regulatory requirements. The paper offers measures to mitigate negative effects of Basel III implementation for Russia. Conclusions and Relevance Basel III regulatory framework aims at improving the banking sector stability. However, its realization requires a number of conditions, i.e. sound economy, flexible banking regulation, transparent banking operations. I expect a slowdown in lending to be a possible adverse effect of Basel III on the Russian economy. In general, the implementation of Basel III alone will not be effective for Russia without improving the practice of estimated loan losses and creating provisions for bad loans.
Keywords: bank capital, capital adequacy, capital structure, expected losses, unexpected losses
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