Pillar 1, 2, 3

The Basel Accords organize international banking standards into three pillars to ensure financial stability. Pillar 1 sets minimum capital requirements banks must hold to cover risks like credit and market fluctuations. Pillar 2 requires banks and regulators to assess and manage additional risks and ensure banks hold enough capital beyond Pillar 1 standards, promoting internal risk management. Pillar 3 emphasizes transparency, requiring banks to disclose risk exposures and capital practices openly, enhancing market discipline. Together, these pillars aim to strengthen banks, protect depositors, and maintain financial system stability.