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Basel Accord
(redirected from Basle Accord)

   Also found in: Wikipedia 0.01 sec.
Basel Accord
Agreement concluded among country representatives in 1988 in Switzerland to develop standardized risk-based capital requirements for banks across countries.

Basel Accord
An agreement on international banking regulations dealing with how banks handle risk. The Basel Accord focuses mainly on credit risk; it divides banks' assets into five categories according to how risky they are. The five categories are assets with no risk, 10% risk, 20%, 50% and 100%. All banks conducting international transactions are required under the Basel Accord to hold assets with no more than 8% aggregated risk. The Accord was promulgated in 1988.Banks in most G-10 countries have implemented it since the early 1990s. It is now considered largely outdated and is in the process of being replaced by Basel II. It is also called Basel I.


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The 1988 Basle Accord on how banks are to maintain adequate capital reserves grew out of these private discussions.
Regulatory Arbitrage The current regulatory regime of the Basle Accord (21) imposes the same risk-based capital charge on differently rated loans.
3 Counterparty risk is considered under the 1988 Basle Accord in which banks are required to set aside capital for off-balance-sheet and derivative instruments (see Basle, 1988).
 
 
 
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