Editing Basel II (section)

{{Short description|Banking regulation framework}}
{{Basel II}}

'''Basel II''' is the second of the [[Basel Accords]], which are recommendations on banking laws and regulations issued by the [[Basel Committee on Banking Supervision]]. It is now extended and partially superseded by [[Basel III]].

The Basel II Accord was published in June 2004. It was a new framework for international banking standards, superseding the [[Basel I]] framework, to determine the minimum capital that banks should hold to guard against the financial and operational risks. The regulations aimed to ensure that the more significant the risk a bank is exposed to, the greater the amount of capital the bank needs to hold to safeguard its [[solvency]] and overall economic stability. Basel II attempted to accomplish this by establishing [[risk management|risk]] and capital management requirements to ensure that a bank has [[capital adequacy|adequate capital]] for the risk the bank exposes itself to through its lending, investment and trading activities. One focus was to maintain sufficient consistency of regulations so to limit competitive inequality amongst internationally active banks.

Basel II was implemented in 2008 in most major economies.<ref name=RiskMag>{{cite news|last=Yetis |first=Ahmet |date=January 2008 |title=Regulators in Accord |url=http://www.risk.net/data/risk/pdf/special/2008/risk_0108_sr_baselii.pdf |newspaper=[[Risk Magazine]] |location=London |access-date=March 30, 2015 |url-status=dead |archive-url=https://web.archive.org/web/20150402172418/http://www.risk.net/data/risk/pdf/special/2008/risk_0108_sr_baselii.pdf |archive-date=April 2, 2015 }}</ref><ref name=OCC>{{cite web|url=http://www.occ.gov/news-issuances/news-releases/2007/nr-occ-2007-123.html|title= OCC Approves Basel II Capital Rule |quote=This final rule is effective April 1, 2008. |work=occ.gov|date= November 2007 }}</ref><ref name=CML>{{cite web |url=http://www.cml.org.uk/cml/policy/issues/721|title=Basel II – questions and answers |work=cml.org.uk|url-status=dead|archive-url=https://web.archive.org/web/20111214061403/http://www.cml.org.uk/cml/policy/issues/721|archive-date=2011-12-14}}</ref> The [[2008 financial crisis]] intervened before Basel II could become fully effective. As [[Basel III]] was negotiated, the crisis was top of mind and accordingly more stringent standards were contemplated and quickly adopted in some key countries including in Europe and the US.