In 1974，the failure of the Herstatt Bank of Germany and the Franklin National Bank of the United States directly gave rise to the establishment of the Basel Committee on Banking Supervision and the birth of the first Basel Accord. Basel Accord I was formed in 1988 after two amendments.

The bankruptcy of Barings Bank and the Asian financial crisis in 1997 were important events leading to Basel II. After the outbreak of the US subprime crisis in 2007，the Basel Committee on Banking Supervision introduced Basel III at the end of 2010. After seven years of research and discussion，the Basel Committee issued in December of 2017 Basel III: Final Plan for the Post-crisis Reform and it will be officially implemented in 2022.

What are the new regulatory trends that have been communicated to us in the latest effort known as Basel III: Final Plan for Post-Crisis Reform?

Each financial crisis reveals different financial risks. In terms of micro-prudential supervision，the Basel Committee found that in the US subprime crisis in 2007 the system’s liquidity had been exhausted，at least momentarily. This reminded the supervisory authorities of the importance of strengthening supervision from the perspective of liquidity risk. Judging from the scope of regulatory indicators，regulators in various countries tend not to rely solely on capital as an indicator of financial strength. Regulators tend to look at financial security under extreme pressures as well as in normal market conditions. Therefore，the micro-prudential supervision has mainly been improved from the aspects of capital quality，transparency and risk coverage，leverage ratio and liquidity requirements. The improvement in macro prudential supervision is mainly reflected in two dimensions. First，it deals with the overall risk of the financial system over time，emphasizing the pro-cyclicality of the financial system. Second，it looks across the sector. It studies how risk is distributed among institutions within the financial system at a certain point of time，as well as relevant bankruptcy risks.