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Abstract: 

International risk-based capital standards were first issued in 1988 to bring some sense of uniformity to the various ways in which countries around the world imposed capital requirements on their banks. Risk-based capital requirements are just that—the more risk a particular asset poses to the bank, the more capital that the bank must maintain against that asset. This article discusses the establishment of the first capital accord in 1988, its implementation in the United States, revisions to the standards since then, and proposals to further strengthen them as a result of the most recent financial crisis.

Keywords: bank capital; capital standards; liquidity; leverage ratio requirement; Basel Committee; Basel III

Affiliations:  1: Arnold & Porter, LLP.