Basel Accord

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Dictionary Says

Definition of '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.
Investopedia Says

Investopedia explains 'Basel Accord'

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.
Search results for

'Basel Accord'

  • Basel II Accord To Guard Against Financial Shocks

    http://www.investopedia.com/articles/07/basel2.asp
    Basel II Accord To Guard Against Financial Shocks. November ... II. (For background
    reading, see Does The Basel Accord Strengthen Banks? ...

  • How Basel 1 Affected Banks

    http://www.investopedia.com/articles/07/BaselCapitalAccord.asp
    ... These listed criticisms have led to the creation of a new Basel Capital Accord,
    known as Basel II, which added operational risk and also defined new ...

  • Is Your Bank On Its Way Down?

    http://www.investopedia.com/articles/fundamental-analysis/09/tier-1-capital-ratio.asp
    ... As defined in the Basel Accord, Tier 1 capital consists of a bank's "equity capital
    and published reserves from post-tax retained earnings". ...

  • Understanding The Basel III International Regulations

    http://www.investopedia.com/articles/economics/10/understanding-basel-3-regulations.asp
    ... To learn more, see Basel II Accord To Guard Against Financial Shocks.) TUTORIAL:
    Economics Basics Basel III and the Banks With that in mind, banks must hold ...

  • The International Money Market

    http://www.investopedia.com/articles/forex/10/international-money-market.asp
    ... Bank capital had to be equal to 4% of assets. (For background reading, see Does
    The Basel Accord Strengthen Banks?); 1992 Single European Act This not only ...

  • The Banking System: Commercial Banking - How Banks Are Regulated ...

    http://www.investopedia.com/university/banking-system/banking-system6.asp
    ... recommendations. The first Basel Accord (Basel I), came out in 1988 and largely
    dealt with recommended capital ratios and risk weightings. The ...

  • No Regrets So Far For Banks That Said No

    http://stocks.investopedia.com/stock-analysis/2009/No-Regrets-So-Far-For-Banks-That-Said-No-CFR-UMBF-BXS-BOH0220.aspx
    ... (Learn more in Does The Basel Accord Strengthen Banks?) Bank of Hawaii (NYSE:BOH)
    earned 81 cents per share in the Q4, about flat with the prior year. ...

  • Using Economic Capital To Determine Risk

    http://www.investopedia.com/articles/economics/08/economic-capital.asp
    ... (For background reading, see Basel II Accord To Guard Against Financial Shocks and
    How Basel I Affected Banks) Regulatory Capital When banks calculate their RC ...

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