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What is the Bank for International Settlements?

The BIS is an international organization that fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. Recently, the activities of the BIS have been newsworthy due to their recommendations of collective action to deal with money laundering and the financing of terrorist activities.

In 1988 the so-called Basel Capital Accord set down the agreement among the G-10 (countries include Belgium, Canada, France, Italy, Netherlands, Japan, United States, Germany, United Kingdom, and Sweden) central banks to apply common minimum capital standards to their banking industries, to be achieved by end-year 1992. The standards are almost entirely addressed to credit risk, the main risk incurred by banks. In 2002 members of the Basel Committee on Banking Supervision reached agreement on a number of important issues related to the New Basel Capital Accord that the Committee has been exploring since releasing its January 2001 consultative paper. The New Basel Capital Accord focuses on minimum capital requirements, which seek to refine the measurement framework set out in the 1988 Accord, supervisory review of an institution's capital adequacy and internal assessment process, and market discipline through effective disclosure to encourage safe and sound banking practices