The Basel Committee on Banking Supervision (hereinafter — the Committee) is closely associated with supranational organisations like the Bank for International Settlements in Basel (BIS), which is often called the «club», the «headquarters» of central banks or the «Central Bank of Last Resort». The Committee’s office is situated in the BIS building. At the end of 1974, following the disequilibrium of international currencies and banking markets caused by the collapse of the Herstatt Bank in West Germany, the heads of central banks in the G10 countries established the Committee under the auspices of the BIS to develop common international rules with regard to banking supervision. The Committee formulates common standards for banking supervision and recommendations for their implementation, on the assumption that national authorised bodies (first and foremost central banks) will push them forwards in their own countries. With regard to G10, this is the group of countries that signed a general agreement on borrowing with the IMF in 1962 (Belgium, Great Britain, West Germany, Italy, Canada, the Netherlands, France, Sweden, the USA and Japan). Switzerland, which was not a member of the IMF, joined in 1964, but the name of the group remained as before. Representatives from Luxembourg were also included in the Basel Committee from the very beginning and, from 2001, the Committee has included representatives from Spain. At present, the Committee includes representatives from central banks and national authorities on banking supervision from 27 countries (the 13 countries already mentioned along with Argentina, Australia, Brazil, China, Hong Kong, India, Indonesia, Korea, Mexico, Russia, Saudi Arabia, Singapore, South Africa and Turkey, which all joined the Committee in 2009). Over almost four decades of its activities, the Committee has published tens of documents on different areas of activity, including general issues on the organisation of supervision, capital adequacy, all kinds of risk, the corporate governance of lending and borrowing organisations and so on.
The Committee’s key area of activity is the definition of standards on capital adequacy for banks. All of the Committee’s documentation is centred around an incredibly simple ratio: equity : a bank’s capital = capital adequacy ratio.
Kabbalists of the money world are looking for this ratio’s magic number, which would guarantee the stability of the banking system. In fact, the Committee is seeking to legitimise what is a crime. In Europe, a system of so-called partial, or incomplete, coverage of obligations by banks as borrowing and lending
This article originally appeared on : Global Research