PERTANIKA JOURNAL OF TROPICAL AGRICULTURAL SCIENCE

The introduction of new capital requirement by the Basel committee has positive and negative impacts on banking stock prices. Previous studies on Basel Accord's minimum capital requirement on various countries have shown mixed results in the stock returns during the announcement date. This paper examines the impact of Basel III announcements on Malaysian banking stocks' returns. Findings showed that investors viewed the implementation of new regulation as bad information and would reduce the banks' stock prices.