Who is subject to Basel III, and what is required?
The Basel accords are voluntary agreements among national banking authorities. The countries signing on to the accords agree to implement the standards through national laws or regulations, and have considerable discretion in how they go about it. The standards have also been implemented by countries that are not parties to the accord. Basel II, for instance, was applicable to all countries in the Organization for Economic Co-operation and Development, but not all countries applied the standards in the same way. In the United States, the Basel II standards were mandatory for only banks with a minimum of $250 billion in assets, or a minimum of $10 billion in foreign exposure, which are considered “core” banks. Banks with higher-risk profiles had higher capital requirements under Basel II. The Basel III standards require that banks maintain a minimum common equity of 7% of their assets, including a capital conservation buffer of 2.5%. Additionally, banks would need a “countercyclical buf
