Basel III

Basel III is the international regulatory framework issued by the Basel Committee on Banking Supervision that tightens the rules on how much capital banks hold and how they manage risk. Developed in response to the 2007-2009 financial crisis, it built on the earlier Basel I and Basel II accords by raising the quality and quantity of required capital and adding new standards for liquidity and leverage. It is the current prudential baseline that internationally active banks are measured against.

• Higher capital quality - Stricter definitions and larger minimums for Tier 1 and common-equity capital.
• Liquidity coverage - The Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) ensure banks can survive funding stress.
• Leverage ratio - A non-risk-based backstop that caps overall leverage regardless of risk weighting.
• Capital buffers - Conservation and countercyclical buffers that build cushions during good times.

In real API operations, Basel III drives the risk-data aggregation, stress-testing, and regulatory-reporting systems that banks must operate — pipelines that increasingly move capital, liquidity, and exposure data over internal and supervisory APIs. It is a core piece of Basel Compliance and the broader landscape of Banking Regulation, and the accuracy and traceability of the data feeding those calculations is exactly what modern, machine-readable financial governance depends on.