The new Basel Capital Accord is one of the main challenges the new banking supervision faces with on international level. It is a complex methodology for determining the capital adequacy, which to large extent, corresponds to and arises from the current situation on the international financial markets. The emergence and the development of the new banking products and instruments and the new methods for managing banking risks imposed a need for serious changes in the current Capital Accord from 1988, which establishes the basic principles for determining the capital required for covering risks a bank is exposed to. As a result of such movements and changes, the Basel Committee of Banking Supervision in 1999 initiated the process of revision of the Capital Accord, in order to develop a new capital requirement framework. In 2004, the Basle Committee adopted the final text of the New Capital Accord, known also as Basel II. After its adoption, large number of countries commenced activities for introduction and implementation of the provisions of the new Accord.
As a result of the global financial crisis which began in 2007, in the past few years, the national financial regulators and the international financial organizations undertook significant activities aimed at strengthening of the financial system and enhancement of its resilience. As part of those activities, the activities of the Basel Committee of Banking Supervision are of special importance. Since the emergence of the crisis until now, the Committee has developed several suggestions for improvement of the current capital framework and strengthening of the prudential standards and it has made amendments in different parts of the Accord. The latest draft amendments to the Basel Capital Accord, known as Basel III, which were adopted by the highest Basel Committee body in August and September 2010, are also targeted in that direction.
Basel II: International Convergence of Capital Measurement and Capital Standards: a Revised Framework
Basel Committee's response to the financial crisis
International regulatory framework for banks (Basel III)