Basel IA was proposed as an intermediate between the then current

Basel I Basel I is the first Basel Accord. It arose from deliberations by central bankers from major countries during the late 1970s and 1980s. In 1988, the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, published a set of minimum ca ...

accord and the

Basel II Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. It is now extended and partially superseded by Basel III. The Basel II Accord was publis ...

accord, which was being implemented at the time. Basel IA would have been more risk sensitive than Basel I but would not be as complex as the advanced approach under Basel II. On July 20, 2007 by a deal between the various US banking regulators (

The Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

, the

Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all nation ...

, the

Office of Thrift Supervision The Office of Thrift Supervision (OTS) was a List of federal agencies in the United States, United States federal agency under the United States Department of the Treasury, Department of the Treasury that chartered, supervised, and regulated all ...

and the

Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures cred ...

) it was decided to drop the proposed Basel IA and allow Basel II Standardised in its place. The US initially proposed that banks would need to use the advanced approach only if they were to implement Basel II. The idea of Basel IA was to enable smaller US banks to adopt a methodology that is more risk sensitive than Basel I that they are currently using for calculating capital adequacy. The Fed chairman mentioned that smaller banks who do not wish to move to Basel II Advanced or Basel IA could continue to operate under Basel I.

External links

{{Portal, Banks
Press release
by the US Fed on the deal of 20 July 2007 *More information about Basel IA can be found in thi
OCC site
Financial regulation Bank regulation