What is Cryptocurrency A new word emerged in our lives two months after the beginning of the recession of 2008 and gradually transformed from a vague expression ("virtual coin") to the vocabulary used to characterize the new economy. On June 9, 2009 the first bitcoin was released by an anonymous person called Satoshi Nakamoto. For different reasons like the sub-prime crisis, Nakamoto, claimed he is a Japanese man in his 30's, said he gave the open protocol in 2007. Today the new coin is called a "Digital Asset" and decentralization is the principal idea behind it: there's no main institution responsible for regulating it. The most familiar and traded form of Blockchain's technology, Bitcoin, who has crossed the $15,000 lines way back and has shows an image of exponential increase in the past few months. The great advantage of blockchain technology is that it doesn't have to keep records for a large central computer or big managing company. With this ...
What is BCBS?
Its vision is to improve understanding of key administrative issues and improve the quality of banking management worldwide. The Committee edges guidelines and standards in different areas – some of the better known among them are the international standards on capital acceptability.
The headquarter for BCBS is located in Basel, Switzerland. The Bank for International Settlement (BIS) acts as a host for BCBS and other international institutions which are engaged in standardization and creating a financial stability. Current Secretary General of the Basel Committee is Carolyn Rogers.
Goal
Global regulations were not achieved in banking and financial markets during globalization. BCBS acts as forum were policy solutions and setback regarding standardization are resolved. BCBS acts as an agent for international financial institutions to develop a trusted connection.
BCBS formulates best standards and guidelines and recommends statements for banking practices. BCBS encourages the members to implement these guidelines into their own national system for banking.
Governance
The Governance of BCBS consists of 3 levels; Board of Directors, General Meeting of BIS Central Bank Members and BIS Management.
The BIS holds 6 committees, which are supervised by 3 groupings in the context of Basel Process: The Global Economic Meeting (GEM), All Governors Meeting, The Group of Governors and Heads of Supervision.
The BCBS also hosts three organizations: The Financial Stability Board, the International Association of Insurance Supervisors and the International Association of Deposit Insurers. Each of them holding a legal identity of their own along with governance arrangement.
The BIS has four main departments:
• The Monetary and Economic Department
• The Banking Department
• The BIS Innovation Hub
• The General Secretariat base
These subdivisions are sustained by the Legal Service and the Communications, Risk Management, Internal Audit and Compliance units.
Members
Committee members of BCBS include Australia, Argentina, Brazil, Belgium, China, Canada, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, The Netherlands, Russia, Saudi Arabia, South Africa, Singapore, Spain, Switzerland, Sweden, Turkey, The United Kingdom and The United States
BASEL-I
Basel 1 was held in 1988 at Basel, Switzerland. Here, central banks from G10 nations came up with 1988 Basel Accords. The Accords suggested new minimum capital requirement for banks to operate. It was enforced by G10 nations in 1992, and were enforced by other nations later.
BASEL-II
Basel 2 in 2004 came up with new minimum capital bank needs to hold to protect from potential risk of operational or financial failure. The accord suggested greater risk the bank takes greater must be its capital reserve to keep its solvency adequate.
The accord also suggested to maintain suggested regulation to limit competitive inequality among international banks. Basel 2 was implemented before 2008 and most developed economies implemented it in initial months of 2008, before Basel 2 was fully implemented 2008 financial crisis interfered, because of crisis many countries quickly implemented it.
BASEL-III
Financial crisis of 2008, revealed many deficits in financial system, the main intend of Basel 3 was to raise capital adequacy, liquidity in market and stress testing of bank systems, it also provided guidelines to reduce bank leverages.
The BCBS agreed upon these terms in 2010, and organized a program to strategically implemented these guidelines between 2013 to 2015, however implementation was rescheduled to 2019 and currently resides till 2022.
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