Basel Regulatory Framework (2024)

The Basel Committee on Banking Supervision (BCBS), on which the United States serves as a participating member, developed international regulatory capital standards through a number of capital accords and related publications, which have collectively been in effect since 1988.

Basel III is a comprehensive set of reform measures, developed by the BCBS, to strengthen the regulation, supervision, and risk management of the banking sector. The measures include both liquidity and capital reforms.

Recent Updates
In October 2013, the Federal Reserve Board proposed rules to implement the Liquidity Coverage Ratio in the United States, which would strengthen the liquidity positions of large financial institutions. The proposal would create for the first time a standardized minimum liquidity requirements for large and internationally active banking organizations and systemically important, non-bank financial companies designed by the Financial Stability Oversight Council. These institutions would be required to hold minimum amounts of high-quality, liquid assets such as central bank reserves and government and corporate debt that can be converted quickly and easily into cash.

In July 2013, the Federal Reserve Board finalized a rule to implement Basel III capital rules in the United States, a package of regulatory reforms developed by the BCBS. The comprehensive reform package is designed to help ensure that banks maintain strong capital positions that will enable them to continue lending to creditworthy households and businesses even after unforeseen losses and during severe economic downturns. This final rule increases both the quantity and quality of capital held by U.S. banking organizations. The Board also published the Community Banking Organization Reference Guide, which is intended to help small, non-complex banking organizations navigate the final rule and identify the changes most relevant to them.