The paper presents the Basel Committee on Banking Supervision. The Committee consists of representatives of central banks and institutions responsible for banking supervision. It was founded in 1974 in response to the crisis in the early seventies and to the growth of international banking which brought forth new kinds of risks to the stability and security of the banking systems. Preventive measures employed in individual countries failed in the case of banks operating internationally. Another destabilising factor was the absence of uniform regulations on banking activities in various countries. Hence, the need appeared to create a supra-national institution which would standardise supervision and harmonise the rules and regulations. The Basel Committee first met in 1975. In the context of the changing banking business, the Committee proved to be a highly professional and effective body. It has been operating ever since, gaining influence year by year.

The Basel Committee is in on-going liaison with the supervisory institutions of its member and co-operating countries. Endowed with no legislative power, it can only issue recommendations and suggestions. The Committee shall primarily secure supervision adequate and proportional to the risks carried in some banking activities, and the extension of this supervision over all banking transactions.

Over thirty years, the Committee has issued a number of recommendations facilitating the business of the banking system and increasing its security and safety. All of them are presented in the article. They have been implemented in many countries, due to the Committee's strong and influential position, and to the co-operation of the member countries.

Not only has the Basel Committee recommended, but has also developed co-operation among various international institutions: those connected with supervision, but also those active on the share market or those setting standards in accounting. This is also discussed in the article. This co-operation has produced numerous other recommendations which have been successfully implemented.

The paper also expands on capital adequacy and the principles of effective supervision; factors that considerably affect the business of banks as well as the supervision over the banking sector.