Basel I

Basel I is a set of international banking regulations set up in 1988 by the Basel Committee on Banking Supervision. The main purpose of these regulations is to make sure banks have enough money to cover their customers' deposits and loans. To do this, banks must keep a certain amount of money – called capital – which is used to cover any losses the bank may have. This way, if a bank makes bad loans or investments, it will still have enough money to pay its customers back. The Basel I regulations had specific ratios that banks had to follow when calculating how much capital they should keep on hand.