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. Basel Accord

    A set of agreements set by the Basel Committee on Bank Supervision ...
  2. Basel I

    A set of international banking regulations put forth by the Basel ...
  3. Basel II

    A set of banking regulations put forth by the Basel Committee ...
  4. Tier 3 Capital

    Tertiary capital held by banks to meet part of their market risks, ...
  5. Bank For International Settlements ...

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

    A term used to describe the capital adequacy of a bank. Tier ...
Related Articles
  1. Trading Strategies

    Introduction To Swing Trading

  2. Personal Finance

    Using Economic Capital To Determine ...

  3. Personal Finance

    Understanding The Basel III International ...

  4. Personal Finance

    How Basel 1 Affected Banks

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. 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 ...
  6. Debit Spread

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