The international financial crisis of 2007-2009 and its aftermath have become known as the Great Recession and is the most severe financial crisis since the Great Depression of 1929-1933. Many industrial countries suffered severe financial turmoil, economic contraction and government debt problems, the result of which will be seen for many years to come. Developing countries were also hit, mainly because of the reduced demands for their exports from industrial countries, but also because of reduced financial flows. The crisis has revealed many shortcomings in the functioning and regulation of financial markets, as well as in the behaviour of role players in the markets. Prior to the crisis, international cooperation on banking regulation had resulted in two multilateral accords, named Basel I and Basel II, which were developed under the leadership of the Basel Committee on Banking Supervision. Basel III was concluded in December 2010 (revised in June 2011) as a “global regulatory framework for more resilient banks and banking systems”. It is an attempt to address many of the shortcoming which the financial crisis exposed through better financial regulation and better coordination globally. This course aims at improving the participant’s understanding of the nature of banking and its functions and limitations in the modern economy, as well as the nature and purpose of the key Basel III measures to address and contain the risks to society of banking activities in imperfect financial markets.