In the late 1980s to the early 1990s, banking regulators adopted risk-based capital standards for commercial banks in Basel Accord I. Now, as a result of the Basel Committee's efforts, we have third installment of the Basel Capital Accord in the form of Basel III. What is the rationale for having the government set capital standards for financial institutions, as opposed to letting the private marketplace set those standards?What are the Basel Committee's objectives and how will its capital accords achieve these objectives?