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Basel Agreement

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The first is addressed by a series of general provisions that require states to respect the basic principles of environmentally sound waste management (Article 4). A number of prohibitions are aimed at achieving the second objective: hazardous waste cannot be exported to Antarctica, to a state that is not a party to the Basel Convention, or to a party that has banned the importation of hazardous waste (Article 4). However, contracting parties may enter into bilateral or multilateral agreements on hazardous waste management with other parties or with non-parties, provided that these agreements are “no less environmentally friendly” than the Basel Convention (Article 11). In all cases where, in principle, cross-border movements are not prohibited, it can only take place if it is an environmentally friendly solution, if the principles of environmentally friendly management and non-discrimination are respected and if they are implemented in accordance with the convention`s regulatory system. The Basel Agreements are an agreement between the Member States of the Basel Committee on the need and method of strengthening regulation in order to achieve and maintain a strong international banking system. The agreements are intended to respond to the desire of industrialized countries to establish a common framework for the supervision of international banks. Moreover, Member States and several non-members will want to implement the agreements, even if the Basel Committee does not have the legal authority to implement its decisions. The peculiarities of different countries inform the Committee`s decision not to legislate on the application of the Basel agreements. The decision to legislate on aspects of the agreements is left to the discretion of the Committee`s Member States. Following the collapse of Lehman Brothers in 2008 and the financial crisis that followed, BCBS decided to update and strengthen the agreements. The reasons cited by BCBS for the collapse were poor governance and risk management, inadequate incentive structures and an over-indebted banking sector. In November 2010, an agreement was reached on the comprehensive approach to capital and liquidity reform.

This agreement is now known as Basel III. In September 2010, the Group of Governors and Supervisors (GHOS) announced higher capital standards for commercial banks.