A second agreement developed by the Basel Committee on Banking Supervision in 2004 to promote international standards for measuring and ensuring the adequacy of a bank's capital.
The Basel Committee issued a compilation of Basel II and related guidance 2006.
Basel II was implemented across the European Union (EU) in 2008.
The changes introduced by Basel II included:
- Refinements to the measurement of credit risk;
- Quantifying the measurement of operational risk;
- Permitting the use of banks' internal risk models, subject to regulatory approval; and
- The concept of the Three Pillars of Capital.
(Basel II is occasionally written as Basel 2.)
Now superseded and updated by later Basel agreements, see links below.