Abstract:
The study aimed 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 descriptive and inferential statistics to analyze the data. The study findings established 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 reduce the probability of financial distress.
