BANKING AFFAIRS

Detailed explanation-1: -Basel II is the second of three Basel Accords. It is based on three main “pillars": minimum capital requirements, regulatory supervision, and market discipline. Minimum capital requirements play the most important role in Basel II and obligate banks to maintain certain ratios of capital to their risk-weighted assets.

Detailed explanation-2: -Basel II is an international business standard that requires financial institutions to maintain enough cash reserves to cover risks incurred by their operations. The Basel accords are a series of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision.

Detailed explanation-3: -Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation, supervision and risk management of banks.

Detailed explanation-4: -Capital. The capital adequacy ratio should be kept at 12.9 percent. The minimum Tier 1 and Tier 2 capital ratios must be maintained at 10.5 percent and 2 percent of risk-weighted assets, respectively. Furthermore, banks must maintain a capital conservation buffer of 2.5 percent.

Detailed explanation-5: -Basel III is an international regulatory accord that introduced a set of reforms designed to mitigate risk within the international banking sector by requiring banks to maintain certain leverage ratios and keep certain levels of reserve capital on hand.