The Status of the Basel III Capital Adequacy Accord

Walter W. Eubanks | Congressional Research Service | 2010-10-28

This report asserts that the new Basel Capital Adequacy Accord (Basel III) is of concern to Congress mainly because it could put U.S. financial institutions at a competitive disadvantage in world financial markets. "The Basel capital accord is an agreement among countries’ central banks and bank supervisory authorities on the amount of capital banks must hold as a cushion against losses and insolvency," the report states. "Higher capital requirements constrain bank lending and profitability. The accords are not treaties."