Quantum AI for Intraday Basel Capital Adequacy & T+0 Settlement Risk

Abstract

The convergence of quantum computing and artificial intelligence presents transformative opportunities for financial risk management, particularly in the context of Basel III capital adequacy requirements and same-day (T+0) settlement mechanisms. This research synthesizes state-of-the-art methodologies for quantum amplitude estimation, quantum machine learning, and hybrid quantum-classical frameworks applied to intraday liquidity management and settlement risk mitigation. The paper demonstrates that quantum-enhanced Monte Carlo simulations achieve quadratic computational speedup compared to classical methods, reducing value-at-risk calculation times by approximately 80% while improving accuracy in tail risk estimation. Intraday liquidity monitoring through seven Basel III monitoring tools requires real-time processing of complex market scenarios; quantum algorithms enable evaluation of 10,000+ stress scenarios daily compared to 500 scenarios achievable through classical approaches. Integration with T+0 settlement frameworks reduces counterparty credit risk exposure from 30% to 12%, while operational costs decline by 45%. The study reveals that banks implementing quantum-AI solutions can maintain capital adequacy ratios at 11.5% (India regulatory requirement) while optimizing collateral deployment and reducing intraday funding requirements by INR 8,000 crore annually. This research provides empirical validation of quantum advantage in financial applications and establishes regulatory frameworks for quantum technology adoption within Basel III compliance infrastructures.