What are the Basel norms?

The Basel committee on banking supervision (BCB) international committee formed to develop standard for banking regulation.

The Basel norms is an efforts to co-ordinate banking regulation across the globe with the goal of strengthening the international banking system . It is the set of agreement by the Basel committee of banking supervision which focuses on the risk to bank and financial system.

Basel committee has formulate

Basel l - Basel capital accord

Basel ll - The new capital framework Basel lll - Responding to the 2007 to 009 financial crises.

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The Basel norms refer to a set of international banking regulations developed by the Basel Committee on Banking Supervision (BCBS). The committee is composed of central banks and regulatory authorities from various countries, and it was established in 1974 by the G10 countries.

There are currently three Basel accords:

1. Basel I: This accord was introduced in 1988 and set out the first set of international minimum capital requirements for banks. It focused on credit risk and required banks to maintain a minimum capital adequacy ratio (CAR) of 8%.

2. Basel II: This accord was introduced in 2004 and revised the capital adequacy framework of Basel I. It introduced three pillars: minimum capital requirements, supervisory review, and market discipline. Basel II also introduced new risk management techniques, such as the internal ratings-based (IRB) approach.

3. Basel III: This accord was introduced in response to the 2008 financial crisis and aimed to strengthen the resilience of the banking system. It introduced higher capital requirements, new liquidity standards, and new leverage ratios. Basel III also introduced a new standardized approach for measuring counterparty credit risk.