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What are the differences between basel 2 and 3?

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BASEL III IS AN ENHANCEMENT OVER BASEL II BROUGHT OUT WITH THE EXPERIENCE OF GLOBAL FINANCIAL TURMOIL - THE ENHANCEMENTS ARE PRIMARILY UNDER TWO HEADS PRIMARILY ONE IS CAPITAL AND OTHER IS LIQUIDITY

CAPITAL THERE IS A MINIMUM PRESECRIPTION OF CAPITAL BY WAY OF COMMON EQUITY UNDER BASEL III. THAT IS TO SAY ALL THE CAPITAL THAT WAS RECKONED UNDER BASEL II WILL NOT BE ELIGIBLE FOR SUCH RECKONING. EX CAPITAL DEBT INSTRUMENTS WITH STEP UP OPTION AFTER CERTAINPERIOD ARE NOT ELIGIBLE. DEDUCTION FROM THE CAPITAL WAS EARLIER CONSIDERED FROM TIER I AND TIER II EQUALLY. UNDER BASEL III DEDUCTIONS WILL BE MADE FROM TIER I CAPITAL ONLY. COUNTER CYCLICAL BUFFER FOR RAINY DAY IS INTRODUCED UNDER BASEL III. FURTHER ADDITIONAL CAPITAL FOR SYSTEMATICALLY IMPORTANT FINANCIAL INSTITUTIIONS (SIFI) INTRODUCED SO THAT LARGE FIs GUAGE RISKS PROPERLY AND NOT IGNITE CONTAGION RISK FOR THE SYSTEM. LIQUIDITY IN ORDER TO IMPROVE THE LIQUIDITY WITHIN AS ALSO ACROSS THE SYSTEM LCR (LIQUIDITY COVERAGE RATIO) AND NSLR (NET STABLE FUNDING RATIO) ARE INTRODUCED

THE IMPLEMENTATION IS PHASED OUT FROM 2013 TO 2018 SO THAT THERE IS NO STRAIN ON THE SYSTEM AND ADEQUATE DISCRETION IS PROVIDED TO THE LOCAL REGULATOR FOR FINE TUNING

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