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Capital requirement

4 May, 2015 - 11:32

The capital requirement sets a framework on how banks must handle their capital in relation to their assets. Internationally, the Bank for International Settlements' Basel Committee on Banking Supervision influences each country's capital requirements. In 1988, the Committee decided to introduce a capital measurement system commonly referred to as the Basel Capital Accords. The latest capital adequacy framework is commonly known as Basel III 1. This updated framework is intended to be more risk sensitive than the original one, but is also a lot more complex.