Basel Accords

The Basel Accords are a series of international regulatory standards for bank capital adequacy, stress testing and liquidity, issued by the Basel Committee on Banking Supervision, hosted at the Bank for International Settlements in Basel, Switzerland. Basel I (1988) introduced minimum capital ratios; Basel II (2004) refined risk-weighting and added supervisory review and market-discipline pillars; Basel III, developed from 2010 to 2011 in response to the 2008 global financial crisis and extended by a further reform package finalized in December 2017, raised capital quality and quantity requirements and added new liquidity and leverage standards. The Accords are not directly binding as law: they are standards member jurisdictions' own regulators and legislatures are expected to adopt domestically, which the European Union has done chiefly through its Capital Requirements Regulation and Directive package and the United States through its federal banking agencies' own regulations.