What was one of the key achievements of Basel I?

One of the key achievements of Basel I was that it defined minimum capital requirements for banks. This was a significant development in banking regulation, established by the Basel Committee on Banking Supervision in 1988. The framework aimed to create a stable and sound banking environment by ensuring that financial institutions maintained adequate capital to sustain their operations and absorb losses.

By setting minimum capital ratios, Basel I sought to enhance bank resiliency and safeguard the global financial system. The requirement for banks to hold a specific percentage of their risk-weighted assets as capital greatly influenced banking practices worldwide, contributing to the overall financial stability. This framework was foundational in establishing subsequent regulations and reforms in the banking sector, paving the way for later agreements such as Basel II and Basel III that expanded and refined these concepts further.