Regulatory Novelty after Financial Crises: Evidence from International Banking and Securities Standards, 1975-2016 (original) (raw)

Global Financial Standards and Regulatory Failure: Lessons for Reforms

Global Standards for Public Authorities, 2012

When the financial turmoil unfolded, a high number of global financial standards and rules, established by transnational regulatory networks such as the Basel Committee on Banking Supervision (BCBS) and the International Organization for Securities Commissioners (IOSCO), existed. The paper argues that attempts to reform the current regulatory framework and to create new rules must take into account – instead of the lack of global rules, which seems, despite existing, confined to limited areas – the reasons which led to the failure of global rules already in place when the crisis started. The Basel capital accord – the very well known Basel II, now revised as Basel III – is considered by many observers to be a case of “regulatory capture”. Data existing before the crisis about credit rating agencies’ compliance with the IOSCO Code of Conduct show compliance assessment is tricky. Reports measuring compliance with the Basel Committee’s Core Principles for Effective Banking Supervision (BCP) in countries like the UK, shortly before the spread of the financial turmoil, arise the question whether principle-based global rules can be effective. The analysis of the different cases of regulatory failure can contribute in assessing the on-going process of reform and can help better tailoring future reforms. In particular, implications for the structure and procedure of the standard setters, and for their overall accountability, are discussed.

The End of an Era in International Financial Regulation? A Post-Crisis Research Agenda

International organization, 2011

The global financial crisis that erupted in summer 2007 has made the reform of international prudential financial regulation one of the top priorities of global public policy+ Past scholarship has usefully explained the creation and strengthening of international financial standards with reference to three policy arenas: interstate, domestic, and transnational+ Despite the accomplishments of this specialist literature, the recent crisis has revealed a number of limitations in the ways scholars have understood interstate power relations, the influence of domestic politics, and the significance of transnational actors within international financial regulatory politics+ Taken together, developments in each of these three arenas suggest that researchers may also need to be prepared to shift from explaining the strengthening of official international standards to analyzing their weakening in the postcrisis world+ The latter task will require scholars to devote more analytical attention to a wider set of international regulatory outcomes, including "informal regulatory convergence," "regulatory fragmentation," and especially "cooperative regulatory decentralization+"

Diverging financial regulation after the crisis

2015

The study aims to compare the regulatory changes occurring on both sides of the Atlantic. An inappropriate regulatory environment contributed to the onset of the financial and economic crisis, and therefore the post-crisis regulation attempts to remedy the earlier deficiencies and address the problems that emerged during the crisis. The study evaluates and compares the latest financial regulation initiatives on both sides of the Atlantic and assesses the diverging attitudes to regulation in the EU and the United States in six exemplary areas: remuneration, bank capital requirements, derivatives, credit rating agencies, the regulation of hedge funds, and consumer protection. Fundamental differences in regulation pose a challenge to firms operating in both environments and harmonisation remains elusive. However, in some areas, regulators from both sides of the Atlantic are willing to give broad deference to certain regulations of foreign jurisdictions, instead of their own ones. Regular dialogue between the United States and the European Union points in the right direction, but as the article points out there are many improvements which still need to be made in order to reach a consensus acceptable for financial market actors as well as regulators.

The financial crisis and the regulatory response: An interim assessment

International Journal of Disclosure and Governance, 2012

Most changes in fi nancial regulation are introduced hastily in response to a crisis. For most people, and politicians, fi nancial regulation is not a topic of consuming interest, and hence it is ignored until it appears in the headlines of the daily news feed. At that point, ' something ' must be done, and so something is. These were the circumstances in which post-2007 reforms were undertaken, and we can now begin to evaluate them, even as they are being put into effect. In the author ' s view, regulatory failure was a part, but not a principal cause, of the fi nancial crisis. Regulatory assumptions-notably as to the effectiveness of hedging strategies in the private sector and the continuous availability of liquidity-proved faulty, and so regulators failed to provide the ' speed bumps ' that are the most effective tool in addressing booms and reducing the impact of busts. Moreover, regulatory models that extrapolate from the past are likely to prove ineffective for at least some futures. Finally, the global regulatory bodies themselves were structurally fl awed, and poorly coordinated, both internationally and within countries. Some structural reform has now been undertaken, globally, within Europe, and within the United Kingdom. Those reforms were certainly necessary, but are not likely to be suffi cient. While it is too early to draw defi nitive conclusions, the reforms to date probably fall short of the mark.

1 Crisis and the Reform of International Financial Regulation1

Global Finance in Crisis: The politics of …, 2010

What began in the summer of 2007 as a problem in a relatively unknown segment of the US housing finance market has very quickly turned into the most severe global financial crisis since the 1930s. The impact of this crisis has escalated far beyond its point of origin, affecting countries around the world, and spilling over from the financial system into the real economy.

Regulatory Responses by Countries to Banking/Financial Crises

Journal of Risk and Financial Management

Banking/financial crises have occurred in countries at all levels of income and in all parts of the world. These crises not only occur too frequently, but also are too costly. Countries everywhere therefore have enacted laws that established regulatory authorities with responsibility to implement appropriate regulations and supervisory practices to promote healthy and stable banking systems. However, relatively recent information has become available that indicates that countries do not choose to regulate and supervise their banks in exactly the same way. Such information helps enable researchers to examine what regulations and supervisory practices work best. The results of these examinations can be extremely important to policy makers when considering changes to make in regulatory regimes in response to the most recent banking crisis.

New International Financial Regulation: Necessity Or Required By Crisis

Annals of Faculty …, 2010

The global economic and financial crisis showed the limits faced by the international financial system. International financial regulations in general, and especially the banking sector regulations, should be refined and adapted to build a stronger and stable ...

Introducing the Revised and Updated Financial Reform Database

Journal of Financial Regulation

This article introduces a revised and updated version of the Financial Reform Database, which is widely used by economists and political economists. In this revision, country coverage is extended from 91 to 100 economies. Also, the time period covered is extended from 1973–2005 to 1973–2013. Furthermore, the coding rule relating to the enhancement of banking supervision is revised to enhance the clarity of the coding criteria used to measure the independence of a banking supervisory agency, taking into account the concepts of institutional independence and supervisory independence. In addition, in order to systematically compare policy changes across time and countries, seven dimensions of financial policies are further divided into 20 financial policy subdimensions, and each of these subdimensional policy scores is separately coded in this revision. This allows researchers to utilize each subdimension depending on their interests. The detailed policy description of each subdimensio...