What is the Basel Accords primarily designed to achieve?

The Basel Accords, which include Basel I, Basel II, and Basel III, are primarily designed to ensure financial stability within the banking sector. These accords establish comprehensive regulations governing the capital adequacy of financial institutions, which means that banks must maintain a certain level of capital reserves relative to their risk-weighted assets.

By enhancing the capital requirements, the Basel Accords aim to reduce the risk of bank failures and systemic crises. The framework encourages banks to operate more conservatively, take fewer excessive risks, and maintain sufficient buffers to absorb losses. This stability is crucial not just for the individual banks, but for the broader financial system and economy, as it helps to prevent crises that can lead to significant economic downturns.

The other options, while important within the banking realm, do not capture the primary focus of the Basel Accords. For instance, increasing bank profits, regulating interest rates, and promoting consumer loans address different aspects of banking and finance but do not encompass the fundamental goal of enhancing financial stability through structured risk management and capital adequacy standards as outlined in the Basel framework.