Basel Accord

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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 It is now considered largely outdated and is in the process of being replaced by Basel II.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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Jones, D., 2000, Emerging Problems With the Basel Capital Accord: Regulatory Capital Arbitrage and Related Issues, Journal of Banking & Finance, 24(1-2): 35-58.
In the wake of the Global Financial Crisis (GFC) it became apparent that there were some shortcomings in the Basel Capital Accord in place at the time, known as Basel II.
Under either approach, EBRD s risk participation is an unconditional and irrevocable obligation designed to allow the partner financial institution to achieve capital relief, fully consistent with the rules of the Basel Capital Accord.
The 1998 Basel Capital Accord, also known as the Basel I Accord, aimed to assess the bank's capital in relation to its credit risk, or the risk of a loss occurring if a party does not fulfill its obligations.
A good starting point for their examination is the FSB Compendium of financial standards, even though the effectiveness of global regulation is strictly linked with the implementation of more specific rules, such as the Basel capital accord, the IOSCO Code of conduct for Credit rating agencies and the FSB recommendations about derivatives and systemically important financial institutions (SIFI).
The work by the Basel Committee on Banking Supervision (BCBS) on the first Basel Capital Accord, (8) Basel I, provided an international consensus framework for bank safety and soundness regulation.
Taipei, July 16, 2012 (CENS) -- The Financial Supervisory Commission (FSC) plans to follow the new version of Basel Capital Accord and introduce two new standards for the liquidity ratios of financial institutions, which will entail stricter definitions for qualified liquid assets.
However, there is still a lot to be done to further improve the IT systems as well as the procedure for capturing data so as to better enable our banks to meet the minimum data/ information requirement necessary for the effective implementation of the Basel capital accord advance approaches in a proactive and disciplined manner, he added.
Basel Banking Control and Audit Committee within BIS have initially published Basel Capital Accord in 1988.
She also represented the Federal Reserve in the Financial Stability Forum and led its efforts to modernize the Basel Capital Accord.
Contributors, who are academics, practitioners, and regulators from around the world, discuss bank regulation and activity expansion in the US, board structure, community banks, performance, mergers and insider trading, the New Basel Capital Accord and operational risk and corporate culture, the Enron and WorldCom failures, and the characteristics of the top 100 world banks, as well as providing case studies of Australian, German, Korean, and Hungarian institutions.