Capital Adequacy Ratio (CAR)

Risk-weighted-assets (RWA) is a post-post in the balance sheet that has been multiplied by the weight of the risk → used to calculate the capital requirement.
Basel Committee found the system to help banks set a level of RWA, depending on the risk weighting of each of the post balance sheet. Each instrument is grouped into 5 categories depending on the credit standing of the counterparty. The weight used was 0%, 10%, 20%, 50% and 100%.
OECD (The Organization for Economic Co-operation and Development) is a group of 30 countries that made commitments to mendemokratisasi the government and the economy.
In Basel I risk some weight to the discretion of supervisors of each State, for example loans to local government can be 0%, 10%, 20% or 50%.

Capital Adequency Ratio (CAR)
Basel I Accord build the relationship between capital and risk, with a simple multiplier factors for the different government debt, bank debt, corporate and individual debt and multiplying it with a target capital ratio. Target capital ratio is the ratio of capital to RWA for international banks.
Basel Committee set a minimum target capital ratio of 8%. Supervisors can set the local rate is higher, when possible, such as in the USA and the UK. Basel Committee specifically allows a minimum current ratio of capital from a bank should reflect risks other than credit risk. (Keep in mind that the risk of dicover only by Basel I credit risk).
Target capital ratio is a simple calculation for the products that are complex. Therefore the Basel Committee revise Basel I to mengcover increased diversification of banking activities.