The Basel Accords

The Basel Accords are international banking regulations developed by the Basel Committee to ensure banks remain stable and can withstand financial stresses. They set standards for how much capital banks must hold as a safety net against potential losses, encouraging prudent risk management. These rules help protect the global financial system by promoting consistency and reducing the risk of bank failures that could impact economies worldwide. In essence, the Basel Accords aim to balance financial innovation with stability, ensuring banks are resilient without restricting their ability to serve customers and support economic growth.