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BASEL COMMITTEE

Background

The history of the Basel Committee begins in 1974. It was created by the central bank

governors of the G10 countries at the time. Representatives of the monetary authorities of

Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain,

Sweden, Switzerland, the United Kingdom, and the US are currently participating.

Plenary meetings of the committee are held four times a year. They usually meet at

the Bank for International Payments in Basel, Switzerland. There is its permanent secretariat

of 12 members.

Which is Basel

These are international banking supervision agreements or recommendations issued

by the International Committee on Banking Supervision (CBSB).

These agreements consist of Basel I, Basel II and Basel III; and are named after the Swiss

city where the Committee establishes its secretariat based at the Bank for International

Payments

The Basel I agreement was signed in 1988, establishing basic principles on which banking

activity should be based such as regulatory capital, permanence requirement, loss-absorbing

capacity and bankruptcy protection. This capital had to be sufficient to address credit, market
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BASEL COMMITTEE
and exchange rate risks. The agreement also provided that the bank's minimum capital should

be 8% of total risk assets (credit, market and change plus)

The Basel II agreement, approved in 2004, although in Spain it was not implemented until

2008. It further developed the calculation of risk-weighted assets and allowed banks to apply

risk ratings based on their internal models, provided they were previously approved by the

supervisor. This agreement therefore incorporated new trends in the measurement and

monitoring of different risk classes. Emphasis was placed on method.

The Basel III agreement, adopted in December 2010, attempted to adapt to the scale of the

economic crisis, taking into account the exposure of much of banks around the world to

"toxic assets" on banks' balance sheets and on derivatives circulating on the market. Fear of

the domino effect that could cause banks to insolvency made new recommendations

established such as:

• Hardening of the criteria and increasing the quality of the volume of capital to ensure its

greater capacity to absorb losses

• Modification of risk calculation criteria to decrease the actual level of exposure

• Constitution of capital mattresses during the good times that allow to cope with the change

of economic cycle

• Introduction of a new leverage ratio as a complementary measure to the solvency ratio

These agreements allow us to avoid systematic risks in situations of banking panic,

the objective of these measures is to strengthen the regulation and supervision and risk

management of banks.

In Colombia there is the financial superintendency, who monitors, controls and

regulates banks. This in order to determine laws and circulars where each bank or entity
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BASEL COMMITTEE
monitored by the superintendency of solidarity or financial must remain to the letter, taking

all more.

Referencias
Información tomada de Redacción PowerData, (Julio,12, 2013)

Jiménez Rodríguez, E. J., & Martín Marín, J. L. (1). El nuevo acuerdo de Basilea y la gestión
del riesgo operacional. UCJC Business and Society Review (formerly Known As Universia
Business Review), 3(7). Recuperado a partir de https://journals.ucjc.edu/ubr/article/view/537

Westreicher G, (2019). Articulo Comité de Basilea

https://economipedia.com/definiciones/comite-de-basilea.html#:~:text=La%20historia%20del
%20Comit%C3%A9%20de,G%2010%20en%20ese%20momento.&text=Normalmente
%20se%20congregan%20en%20el,secretar%C3%ADa%20permanente%20de
%2012%20miembros.

References

Information taken from PowerData Writing, (July,12, 2013)