Answer to Question #320606 in Finance for Comfort

Question

Give reasons that led to the introduction of the basel 1,2 and 3?

Answer 1

It's original aim was the enhancement of financial stability by improving supervisory knowhow and the quality of banking supervision worldwide.

Monitoring and ensuring the capital adequacy of banks and the banking system.

Basel 1 was established to specify a minimum ratio of capital to risk weighted assets for the bank.

Basel 2 was established to introduce supervisory responsibilities and to further strengthen the minimum capital requirement.

Basel 3 was established to promote the need for liquidity buffers.