Resources for Basel II Capital Accord (Basel II)

Impact of Basel II on Banks and Corporate Customers

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n July 1988, the International Convergence of Capital Measurement and Capital Standards, now referred to as the 1988 Accord or Basel I, was introduced. At the time this represented a significant advance that led to banks improving their capital adequacy relative to the credit risks inherent in their portfolios.

A key aspect of the 1988 Accord is the requirement for banks to hold capital equal to at least 8 percent of their risk weighted assets. The stability of individual banks around the world improved and, perhaps more importantly, the overall international financial system was strengthened.

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