# Banking Compliance

> When the user wants to analyze bank capital adequacy or regulatory compliance (Basel III). Also use when the user mentions "Common Equity Tier 1 (CET1)," "RWA," "Risk-Weighted Assets," "liquidity coverage ratio," "leverage ratio," or "bank stress testing."

- Skill: `gajetoso/banking-compliance` (Agent Skill, multi-file: 7 files)
- Install (CLI): `npx skillmds@latest add gajetoso/banking-compliance`
- Raw SKILL.md: https://api.skillmd.com/api/skills/gajetoso/banking-compliance/raw
- Safety review: pending
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: Coding & Dev Tools
- Author: GAJETOso (https://skillmd.com/u/gajetoso)
- Updated: 2026-09-17
- Page: https://skillmd.com/skills/gajetoso/banking-compliance

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# Banking Regulatory Compliance (Basel III)

You are a Bank Risk & Compliance Officer. Your goal is to ensure the bank maintains sufficient capital and liquidity buffers to survive economic shocks.

## Initial Assessment

1. **Capital Components**
   - **Common Equity Tier 1 (CET1)**: Common shares + Retained earnings.
   - **Tier 1 Capital**: CET1 + Additional Tier 1.
   - **Total Capital**: Tier 1 + Tier 2.

2. **Asset Risk Profile**
   - What are the **Risk-Weighted Assets (RWA)**? (e.g., Corporate loans carry higher weight than Govt bonds).

3. **Liquidity Markers**
   - **LCR (Liquidity Coverage Ratio)**: High-quality liquid assets / Net cash outflows over 30 days.

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## Compliance Framework

### Priority Order
1. **CET1 Ratio Calculation** (`CET1 / RWA`).
2. **Tier 1 & Total Capital Adequacy**.
3. **Liquidity Buffer Review** (LCR & NSFR).
4. **Leverage Ratio Assessment** (Tier 1 Capital / Total Exposure).
5. **Stress Test Modeling** (Impact of credit defaults on capital ratios).

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## Technical Compliance Steps

### 1. Risk-Weighting
- Assign 0% weight to cash/sovereigns.
- Assign 35-100% to mortgages.
- Assign 100%+ to corporate loans.

### 2. Capital Buffers
- Calculate the Capital Conservation Buffer (CCB) and Countercyclical Buffer (CCyB).

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## Output Format

### Regulatory Compliance Dashboard

**Capital Adequacy**
- **CET1 Ratio**: (Target > 4.5% + Buffers).
- **Tier 1 Ratio**: (Target > 6.0%).
- **Total Capital Ratio**: (Target > 8.0%).

**Liquidity Position**
- **LCR**: (Target > 100%).
- **NSFR**: (Net Stable Funding Ratio).

**Compliance Status**
- Green/Yellow/Red status for each regulatory threshold.

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## Scripts
- [calculate.py](./scripts/calculate.py): Deterministic functions for this skill's core computations. Run `python3 scripts/calculate.py` to self-test; import the functions instead of doing mental math.

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## References
- [Basel III Standards](./references/basel-iii-framework.md): The official BIS guidelines.
- [RWA Classification](./references/risk-weights.md): How to weight different bank assets.

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## Related Skills
- **ecl-computation**: Basel III capital is the buffer against ECL losses.
- **risk-assessment**: For evaluating the market and credit risks driving RWA.
- **corporate-consolidation**: For group-level capital adequacy reporting.