Basel I

The first of the three Basel Accords, Basel I is focused primarily on lending or credit risk through the construction of a classification system for bank assets.

Designated as percentages (0%, 10%, 20%, 50% and 100%), bank assets are divided under Basel I into five different risk classifications, depending on the type of debt. So, according to Basel I, the "safest" (0%) debt would be Fed and OECD (Organization for Economic Cooperation and Development) government debt, while the "riskiest" (100%) types of debt could be real estate, bank debt (non-OECD) or other private sector debt.

Also, under the regulation, Tier 1 (core) and Tier 2 (supplementary) capital must be maintained for at least 8% of a bank's risk-weighted assets (assets or off-balance-sheet exposures, weighted by risk).