What Is It
The amount of Tier I and Tier II long term funding that banks are required to hold under the Basel accord.

Who?
Set by the Bank for International Settlements.

How?
Under the current Basel accord, a banks regulatory capital requirements are broadly calculated based on the risk faced.

The new Basel II accord will calculate the banks risk profile by analysing down to the individual loan level. Basel II is due to take effect in 2006.

In software terms, calculation of regulatory capital requirements and there reporting is a lot more onerous. Thus testing software for Basel II is a big opportunity for testers.