Basel Capital Accord
Known as the Basel Accord. Policy agreement on the supervision of banks, developed in 1988 by the Basel Committee on Banking Supervision. The Accord aims to achieve international convergence in the measurement of capital adequacy of banks and to establish minimum capital standards. The Accord is soon to be replaced with another Accord which will change banking regulation through its rules on the amount of regulatory capital that banks will be required to hold to cover credit, market and operational risks, supervisory issues, economic capital and interest rate risk and disclosure requirements.
Related links
+ Basel Accord / Basel I / Basel Capital Accord
USA
Basel Accord; Also known as Basel I and the Basel Capital Accord.
Policy agreement on the supervision of banks, developed in 1988 by the Basel Committee. The Accord aims to achieve international agreement on the measurement of capital adequacy of banks and to establish minimum capital standards.
In 2004 the Basel Committee published Basel II, which is based on three "pillars":
• Pillar 1 - banks must determine their eligible capital and minimum capital requirements in relation to credit risk, operational risk and market risk taken on by the bank.
• Pillar 2 - a supervisory review process whereby supervisors are required to assess how well banks are assessing their capital requirements relative to the risks they are exposed to, and to intervene where necessary.
• Pillar 3 - market discipline, via a requirement for banks to disclose to their peers key information.
In December 2007, US bank regulators published the rule for US implementation of the capital adequacy framework set out in Basel II, that is mandatory for some US banks and optional for others.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • Basel II Accord — Basel II (also known as Βασιλεία ΙΙ in Greek) is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. The purpose of Basel II, which was initially… …   Wikipedia

  • Basel Accord — Known as the Basel Capital Accord. Policy agreement on the supervision of banks, developed in 1988 by the Basel Committee on Banking Supervision. The Accord aims to achieve international convergence in the measurement of capital adequacy of banks …   Law dictionary

  • Basel I — Known as the Basel Accord. Policy agreement on the supervision of banks, developed in 1988 by the Basel Committee on Banking Supervision. The Accord aims to achieve international convergence in the measurement of capital adequacy of banks and to… …   Law dictionary

  • Basel IA — was proposed as an intermediate between the current Basel I accord and the Basel II accord that is being implemented. Basel IA would have been more risk sensitive than Basel I but would not be as complex as the advanced approach under Basel II.On …   Wikipedia

  • Capital requirement — The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk weighted.… …   Wikipedia

  • Basel II — A set of banking regulations put forth by the Basel Committee on Bank Supervision, which regulates finance and banking internationally. Basel II attempts to integrate Basel capital standards with national regulations, by setting the minimum… …   Investment dictionary

  • Capital adequacy ratio — (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR), is a ratio of a bank s capital to its risk. National regulators track a bank s CAR to ensure that it can absorb a reasonable amount of loss [Cite web |… …   Wikipedia

  • Basel (disambiguation) — Basel may refer to:*Basel, a city in Switzerland, capital of the canton of Basel City * Basel (canton), a historical Swiss canton, now divided into two cantons: **Basel Country **Basel City * FC Basel a football (soccer) club based out of Basel,… …   Wikipedia

  • Basel I — is the round of deliberations by central bankers from around the world, and in 1988, the Basel Committee (BCBS) in Basel, Switzerland, published a set of minimal capital requirements for banks. This is also known as the 1988 Basel Accord, and was …   Wikipedia

  • capital adequacy — The principle upheld by banking regulators that banks should have, and be seen to have, a certain amount of capital relative to the amount of business which the banks undertake and the commercial risk associated with that business. UK banks… …   Law dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”