| dc.description.abstract | Commercial banks are key players in the financial system, and they help mitigate the
significant informational costs of assessing and monitoring the creditworthiness of
borrowers. The soundness of the banking system is a key element in the implementation
of the prudential framework, especially with reference to capital regulation, that aims to
control bank risk taking. Thus, Effective banking supervision and sufficient bank
capitalization are stipulated as the two cornerstones for a stable financial system and will
reduce the likelihood of financial distress. Therefore, this study aims at examining the
relationship between adherence to Basel III accord and financial distress status of
commercial banks in Kenya. This study adopted a descriptive research design and the
population for this study consisted of all the 43 commercial banks in Kenya. The study
used secondary data, which was obtained from the listed companies financial statements
from 2013-2014. The study used a multiple regression model to examine the relationship
between Basel III accord and financial distress status of commercial banks in Kenya. The
study findings established that that capital requirements, leverage requirements and
liquidity requirements have a positive relationship with financial distress status of
commercial banks in Kenya hence the Basel III accord requirements positively influence
the financial distress of commercial banks in Kenya. The study concluded that that the
adoption of Basel III influences the financial distress status of commercial banks in
Kenya and recommended that commercial banks should develop effective policies to
ensure that they implement the Basel III Accord since its implementation would help the
banks reduces the probability of financial distress. | en_US |
