The Bank for International Settlements Capital Adequacy ‘Rules': Implications for Banks Operating in the UK

Abstract

In December 1987 the Basle Committee of Supervisors, operating under the auspices of the Bank for International Settlements (BIS), published guideline proposals for the approach to be taken by supervisors in the Group of Ten (G10) countries to the measurement and assessment of the capital adequacy of ‘internationally-active’ banks operating within their national boundaries. With some minor adjustments, these proposals were duly confirmed in July 1988 following extensive consultations with national supervisory bodies. The implications of these ‘rules', as interpreted and implemented by the Bank of England, for the capital requirements imposed on banks operating in the UK are assessed.