Basel Criteria

The Basel Criteria are international standards developed by the Basel Committee to ensure banks maintain enough capital to cover potential losses and remain stable during economic downturns. They set guidelines for how much capital banks should hold as a safety buffer, promoting consistency and safety across global financial institutions. This helps prevent bank failures, protects depositors, and sustains confidence in the financial system. Essentially, the Basel Criteria act as a risk management framework to keep banks resilient and the economy functioning smoothly.