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Basle Convergence Agreement
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An international compact to establish and implement common standards for bank capital adequacy. These and similar capital adequacy rules have encouraged banks to embrace disintermediation with the object of cleaning up their balance sheets. In addition, banks have tried to replace interest rate spreads with trading spreads and fees. There has been an overall tendency to transfer credit risk from banks to other financial market participants. See Bank Capital Adequacy Requirements, Capital Adequacy Directive. See also Add-On, Bank for International Settlements (BIS).
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