The federal banking agencies have announced their support for the conclusion of efforts to reform the international bank capital standards initiated in response to the global financial crisis.
The Basel Committee on Banking Supervision Thursday finalized the reforms to the “Basel III” agreement on bank capital standards. With this agreement, the Basel Committee will bring to conclusion the international reforms initiated in response to the global financial crisis.
Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation, supervision and risk management of banks.
Like all Basel Committee standards, Basel III standards are minimum requirements which apply to internationally active banks. Members are committed to implementing and applying standards in their jurisdictions within the time frame established by the Committee.
The Basel III framework is a central element of the Basel Committee’s response to the global financial crisis. It is intended to address a number of perceived shortcomings in the pre-crisis regulatory framework and is to provide a foundation for a resilient banking system that will help avoid the build-up of systemic vulnerabilities. The framework is intended to allow the banking system to support the real economy through the economic cycle.
A summary of the components of the Basel II reforms are available here:
https://www.bis.org/bcbs/publ/d424_inbrief.pdf