Basel Accord

Basel Accord
A set of agreements set by the Basel Committee on Bank Supervision (BCBS), which provides recommendations on banking regulations in regards to capital risk, market risk and operational risk. The purpose of the accords is to ensure that financial institutions have enough capital on account to meet obligations and absorb unexpected losses.

The first Basel Accord, known as Basel I, was issued in 1988 and focuses on the capital adequacy of financial institutions. The capital adequacy risk, (the risk that a financial institution will be hurt by an unexpected loss), categorizes the assets of financial institution into five risk categories (0%, 10%, 20%, 50%, 100%). Banks that operate internationally are required to have a risk weight of 8% or less.

The second Basel Accord, known as Basel II, is to be fully implemented by 2015. It focuses on three main areas, including minimum capital requirements, supervisory review and market discipline, which are known as the three pillars. The focus of this accord is to strengthen international banking requirements as well as to supervise and enforce these requirements.


Investment dictionary. . 2012.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • 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 Accord — The Basel Accord(s) or Basle Accord(s) (see spelling section below) refers to the banking supervision Accords (recommendations on banking laws and regulations), Basel I and Basel II issued by the Basel Committee on Banking Supervision (BCBS).They …   Wikipedia

  • Basel Accord — Agreement concluded among country representatives in 1988 in Switzerland to develop standardized risk based capital requirements for banks across countries. Bloomberg Financial Dictionary * * *    See Basel Rules * * * Basel Accord UK US noun [C] …   Financial and business terms

  • 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… …   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 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

  • Accord — is of the semantic paradigm: agreement, harmony, alignment or concurrence and may refer to: Places* Accord, New York, a hamlet in Ulster County, seat of the Town of RochesterPeace agreements*Arab Israeli conflict ** Camp David Accords (1978) in… …   Wikipedia

  • Basel Rules — or Basel Accord    Guidelines set by the Basel Committee of the BIS on the amount of capital that banks need to cover risks of default on their loan portfolio, or other problems with their operations. The riskier the loan portfolio the higher the …   Financial and business terms

  • 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 (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

Share the article and excerpts

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