What is Basel II?
Teri Geske Senior Vice President, Product Development If you work in the banking industry you are probably at least somewhat familiar with the term “Basel II”, and if you have been involved with preparing for its implementation you might assume that everyone in the financial services industry has heard more than enough on this subject. But while Basel II is an important, far-reaching policy that will impact the majority of the world’s financial institutions, it directly affects only the banking community. So, for those who are still not clear what all the fuss is about, we offer this review of the basics of Basel II. The “Basel II Accord” (“Basel” refers to the meeting place of the group that authored the Accord), or more precisely, the “International Convergence of Capital Measurement and Capital Standards: a Revised Framework”, is an agreement among the central banks of the G10 countries that affects most banks involved in cross-border banking activities. The purpose of the Accord, w
