Page 37 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.79, # 2, 2022, pp. 37-50

BASEL STANDARDS AND THEIR APPLICATION

NIGAR HUSEYNLI
Department of Business Management, UNEC Business School at Azerbaijan
State University of Economics (UNEC)
E-mail: [email protected]

Received: October 15; accepted November 25, 2022; published online December 23, 2022

ABSTRACT:
The main purpose of this study is to examine the Basel standards, which have such an
important share in the banking sector. The study highlights the importance of Basel
standards to determine how banks guarantee themselves and minimize their risks by
applying Basel standards to the banking system. Actions and practices to be taken
within the framework of banks with a strong and stable structure, affected by different
levels of risks, have brought international research and standards creation to the
agenda. With the establishment of the Bank for International Settlements in 1930, the
global banking and financial sector was tried to be standardized and further developed.
The Basel Committee on Banking Supervision, established in 1974 as part of the Bank
for International Settlements; By trying to create international standards in areas such
as risk management and capital adequacy, it aimed for banks to comply with these
standards at an optimal level. While there are many rules created and published by the
Basel Committee Standards to ensure financial stability is built on a solid foundation,
the most widely recognized are: There are Basel I, Basel II and Basel III criteria.

Key Words: Banking, BASEL I standard, BASEL II standard, BASEL III
standard, risk

Jel classification: E5, G2, G3

INTRODUCTION
The rapid economic developments in the world naturally affect all sectors. One of the
sectors directly and most affected by these developments has been the finance sector.
Because, the circulation of commercial life primarily depends on the healthy
functioning of the financial sector. The most important instrument of the financial
sector is the banks, which finance the real sector when necessary.

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