Basel III

AAA

DEFINITION of 'Basel III'

A comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009, giving banks approximately three years to satisfy all requirements. Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain capital requirements.

INVESTOPEDIA EXPLAINS 'Basel III'

Basel III is part of the continuous effort made by the Basel Committee on Banking Supervision to enhance the banking regulatory framework. It builds on the Basel I and Basel II documents, and seeks to improve the banking sector's ability to deal with financial and economic stress, improve risk management and strengthen the banks' transparency. A focus of Basel III is to foster greater resilience at the individual bank level in order to reduce the risk of system wide shocks.

RELATED TERMS
  1. Bank For International Settlements ...

    An international organization fostering the cooperation of central ...
  2. Tier 1 Capital

    A term used to describe the capital adequacy of a bank. Tier ...
  3. Tier 2 Capital

    One of two categories by which a bank's capital is divided. Tier ...
  4. Basel Committee On Bank Supervision

    A committee established by the central bank governors of the ...
  5. Capital Requirement

    The standardized requirements in place for banks and other depository ...
  6. Basel Accord

    A set of agreements set by the Basel Committee on Bank Supervision ...
Related Articles
  1. Introduction To Swing Trading
    Trading Strategies

    Introduction To Swing Trading

  2. Using Economic Capital To Determine ...
    Personal Finance

    Using Economic Capital To Determine ...

  3. Understanding The Basel III International ...
    Personal Finance

    Understanding The Basel III International ...

  4. How Basel 1 Affected Banks
    Personal Finance

    How Basel 1 Affected Banks

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center