CREST Practitioner Security Analyst (CPSA) Practice 2025 - Free CPSA Practice Questions and Study Guide

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The Basel Accord requires banks to hold as capital at least what percentage of their risk-weighted assets?

8%

The Basel Accord, specifically Basel I, established the minimum capital requirements for banks, emphasizing the need for a strong capital base to support operations and absorb potential losses. According to these regulations, banks are required to maintain a minimum capital adequacy ratio, which is set at 8% of their risk-weighted assets. This requirement is aimed at ensuring that banks have enough capital to cover risks associated with their assets, thus promoting stability in the financial system.

Holding at least 8% of risk-weighted assets as capital indicates that the bank is better positioned to handle unexpected losses, mitigate risks, and maintain solvency during financial downturns or crises. This framework has been crucial in shaping banking regulations globally and fostering confidence in the banking system.

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