Basel Accords

The Basel Committee, based at the Bank for International Settlements in Basel, Switzerland, brings together banking regulators from major economies. Its standards are not laws in themselves, but member countries implement them through national rules.

Basel I, agreed in 1988, set minimum capital requirements based on the riskiness of banks' assets. Basel II, published in 2004, introduced more risk-sensitive approaches, including allowing banks to use their own models, along with supervisory review and disclosure requirements.

Basel III, developed after the 2008 financial crisis, raised the quality and quantity of capital, introduced capital buffers, a leverage ratio and liquidity requirements, such as the liquidity coverage ratio and net stable funding ratio, and added extra requirements for systemically important banks. A final package of reforms, finalised in 2017 and sometimes called Basel IV, limits banks' use of internal models and is being implemented over several years, with timing varying by country.

The accords aim to make banks more resilient and to create a more level playing field internationally.