The overarching goal for the Basel II Framework is to promote the adequate capitalisation of banks and to encourage improvements in risk management, thereby strengthening the stability of the financial system. This goal will be accomplished through the introduction of “three pillars” that reinforce each other and that create incentives for banks to enhance the quality of their control processes. The first pillar represents a significant strengthening of the minimum requirements set out in the 1988 Accord.

“Pillar 1” of the new capital framework revises the 1988 Accord's guidelines by aligning the minimum capital requirements more closely to each bank's actual risk of economic loss.This graphic depicts a bank walking across a tight rope. This is a representation of a bank with a portfolio of high risks. The cushion ( minimum capital) is thick or high. This represents the Basel 11 Accord requiring a higher minimum capital to those financial institutions with higher risk profiles.