In practice, however, regulators relied increasingly on capital requirements, accounting rules, and to a lesser extent, limits on bank transactions with their corporate affiliates, to promote the safety and soundness of banking organizations. Although they had long used bank capital ratios as a supervisory tool, U.S. bank regulators did not impose explicit minimum capital requirements until the 1980s.
In the ensuing quarter century, the attention of banking regulators has been heavily oriented toward elaborating capital requirements to reflect more precisely the particular risks faced by a financial institution – first through the Basel I process and more recently through the lengthier and more complex Basel II process.