The Basel Committee on Banking Supervision, often referred to as the Basel Committee, is an international organization that sets standards and guidelines for banking regulations. It operates under the auspices of the Bank for International Settlements (BIS), which serves as the bank for central banks.
Basel Committee's Role
The primary objective of the Basel Committee is to promote financial stability and enhance the resilience of the global banking system. It achieves this by developing and issuing regulatory standards and guidelines that member countries are encouraged to adopt and implement. These standards address various aspects of banking regulation, including capital adequacy, risk management, and supervisory practices.
Relationship with BIS
The Basel Committee is closely associated with the BIS, but it is important to note that they are separate entities. The BIS is responsible for providing a platform for central banks to collaborate and exchange information, while the Basel Committee focuses specifically on banking supervision and regulation. However, given the shared objectives and close cooperation between the two, they are often considered together as part of the broader efforts to maintain global financial stability.
Global Impact
The work of the Basel Committee has had a significant impact on global banking regulations. The standards and guidelines developed by the committee are widely regarded as best practices in the industry. Many countries have incorporated these standards into their national banking regulations, leading to greater consistency and harmonization in the global banking system. The committee also plays a crucial role in monitoring and addressing new emerging risks to the financial system, ensuring that banks adapt to changing market conditions.
Nina She