The 1988 Basel Capital Accord was a major achievement in establishing a uniform standard for internationally active banks. In the years since, the committee has continued to develop and refine the standard in an effort to keep pace with banking practices and to maintain adequate levels of bank capital throughout the world.
Many have asked why the Basel Committee is revising the accord at this time. There has been recognition from the start that the 1988 accord was rather crude and imperfect in many respects. Although that accord incorporates some differentiation in credit risk, it is limited.