Basel Accords

About Basel Accords

The Basel Accords are international banking regulations setting minimum capital requirements. Basel I in 1988 required banks to hold at least 8 percent capital against risk weighted assets. Basel II in 2004 refined risk weighting but was criticized for allowing banks to use internal models. Basel III, agreed in 2010 after the 2008 crisis, imposed stricter capital requirements, leverage ratios, and liquidity coverage ratios. The Basel Committee meets at the Bank for International Settlements in Basel, Switzerland. Implementation has been slow, with full Basel III implementation repeatedly delayed. Critics argue Basel rules are too complex and may constrain lending. The Basel framework is the foundation of global bank regulation.