Due to differences in the time zones, there was a lag in the dollar payment to the counterparty banks; during this lag period, before the dollar payments could be effected in New York, the Herstatt Bank was liquidated by German regulators.
Assets of banks were classified and grouped in five categories according to credit risk, carrying risk weights of 0% (for example cash, bullion, home country debt like Treasuries), 20% (securitisations such as mortgage-backed securities (MBS) with the highest AAA rating), 50% (municipal revenue bonds, residential mortgages), 100% (for example, most corporate debt), and some assets given no rating.
Banks with an international presence are required to hold capital equal to 8% of their risk-weighted assets (RWA).
From 1988 this framework was progressively introduced in member countries of G-10, comprising 13 countries as of 2013[update]: Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, Netherlands, Spain, Sweden, Switzerland, United Kingdom and the United States.
Basel I incentivized global banks to lend to members of the OECD and the IMF's General Arrangements to Borrow (GAB) while disincentivizing loans to non-members of these institutions.