Basel I is the term which refers to a round of deliberations by central bankers from around the world, and in 1988, the Basel Committee (BCBS) in Basel, Switzerland, published a set of minimal capital requirements for banks. This is also known as the 1988 Basel Accord, and was enforced by law in the Group of Ten countries in 1992, with Japanese banks permitted an extended transition period. Basel I, is now widely viewed as outmoded, and a more comprehensive set of guidelines, known as Basel II are in the process of implementation by several countries. A central bank is an entity responsible for monetary policy of its country (or in the case of the EU, group of member countries). ... 1988 (MCMLXXXVIII) was a leap year starting on a Friday of the Gregorian calendar. ... Basel Committee on Banking Supervision is an institution created by the central bank Governors of the Group of Ten nations (see G-10). ... Location within Switzerland Basel (English traditionally: Basle , German: Basel , French Bâle , Italian Basilea ) is Switzerlands third most populous city (188,000 inhabitants in the canton of Basel-City as of 2004; the 690,000 inhabitants in the conurbation stretching across the immediate cantonal and national boundaries made Basel... The Group of Ten or G10 refers to the group of countries that have agreed to participate in the General Arrangements to Borrow (GAB). ... 1992 (MCMXCII) was a leap year starting on Wednesday. ... Basel II is a round of deliberations by central bankers from around the world, under the auspices of the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, aimed at producing uniformity in the way banks and banking regulators approach risk management across national borders. ...

Background

The Committe was formed in response to the messy liquidation of a Frankfurt bank in 1974. On 26th June 1974, a number of banks had released Deutschmarks to the Bank Herstatt in Frankfurt in exchange for dollar payments deliverable in New York. On account of differences in the time zones, there was a lag in the dollar payment to the counter-party banks, and during this gap, and before the dollar payments could be effected in New York, the Bank Herstatt was liquidated by German regulators. (Redirected from 26th June) June 26 is the 177th day of the year (178th in leap years) in the Gregorian Calendar, with 188 days remaining. ... 1974 (MCMLXXIV) is a common year starting on Tuesday (click on link for calendar). ... A 10 Deutsche Mark banknote from Germany 1993 showing Carl Friedrich Gauss (http://www. ... (?) [ˈfraŋkfʊrt] is the largest city in the German state of Hesse and the fifth-largest city in Germany. ... State nickname: The Empire State Official languages None. ... Time zones are areas of the Earth that have adopted the same standard time, usually referred to as the local time. ...

This incident prompted the G-10 nations to form towards the end of 1974, the Basel Committee on Banking Supervision, under the auspices of the Bank of International Settlemets (BIS).

Main framework

Basel I, that is, the 1988 Basel Accord, primarily focused on credit risk. Assets of banks were classified and grouped in five categories according to credit risk, carrying risk weights of zero (for example home country sovereign debt), ten, twenty, fifty, and up to one hundred percent (in this category has, as an example, most corporate debt). Banks with international presence are required to hold capital equal to 8 % of the risk-weighted assets. Credit risk is the risk of loss due to a counterparty defaulting on a contract, or more generally the risk of loss due to some credit event. Traditionally this applied to bonds where debt holders were concerned that the counterparty to whom theyve made a loan might default on... A sovereign bond is a bond issued by a national government as opposed to a municipal bond which is issued by a subdivision of a national government. ...

Since 1988, this framework has been progressively introduced in member countries of G-10, currently comprising 13 countries, namely, Belgium, Canada, France, Germany, Italy, Japan, Luxemburg, Netherlands, Spain, Sweden, Switzerland, United Kingdom and the United States of America. Luxembourg - a small country in west Europe Luxembourg (city) - the capital city of the country Luxembourg (district) - a district in the country Luxembourg, province of Belgium Luxemburg, Iowa - a city in the USA Luxemburg, Wisconsin - a village in the USA Luxembourg Garden, Paris, France Luxemburg Township, Minnesota - a township in...

Most other countries, currently numbering over 100, have also adopted, at least in name, the principles prescribed under Basel I. The efficiency with which they are enforced varies, however, even within nations of the Group of Ten.