Basel Accords

The Basel Accords are international agreements that set banking regulations to ensure financial stability and reduce the risk of bank failures. Established by the Basel Committee on Banking Supervision, these accords focus on capital requirements, risk management, and improving the banks' ability to absorb losses. The main versions, Basel I, II, and III, introduced measures for assessing credit risk, maintaining sufficient capital reserves, and enhancing transparency. Essentially, they aim to create a safer banking environment globally, protecting economies and consumers by preventing crises stemming from inadequate banking practices.