The Committee on Banking Regulations and Supervisory Practices (Basel Committee) was established in 1974. The Committee was comprised of the central bank Governors of the Group of Ten countries. These countries in particular are Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. The repercussions of the turmoil in markets and international currency created the need for this congregation. The Basel Committee was tasked to oversee and supervise financial institutions and to issue recommendations and standards on banking laws and regulations. It serves as the forum for cooperation on sound banking practices for member countries.
In 1988, the Basel Committee gave birth to Basel Capital Accord, or the 1988 Accord. The 1988 Accord was to serve as the international standard to be followed by financial institutions. This has come to be known as a stabilising instrument in banking institutions that foster cooperation among participating countries. The aim of the 1988 Accord was to give a new framework that will strengthen the stability of the banking system and to make sure that the framework will be fair and consistent in application to various banks to reduce inequality among international banks. ...Show more