Basel Accord

The Basel Accords are international financial regulations developed by the Basel Committee on Banking Supervision. These accords establish minimum capital requirements for banks, aiming to protect depositors from losses by ensuring banks maintain an adequate equity cushion.12

The Basel Committee, part of the Bank for International Settlements, promotes cooperation among central banks and sets standards for banking supervision, including capital adequacy and cross-border activities. The first accords (Basel I and II) introduced risk-weighted capital-to-asset ratios. Following the 2008 financial crisis, Basel III was introduced, increasing capital requirements and adding other safeguards. These standards are advisory, with member countries deciding on their formal adoption.31