Basel II

Basel II is an international set of banking regulations that aims to ensure banks have enough capital to handle financial risks. It focuses on three main areas: identifying the risks banks face (like bad loans or market changes), using more accurate methods to measure these risks, and setting minimum capital requirements based on that assessment. This approach encourages banks to better manage their risk levels, making the financial system more stable and resilient against potential crises. Overall, Basel II promotes safer banking practices through improved risk management and capital adequacy standards.