Pre-GFC Bank Behaviour Change and Basel Accords

2014 ◽  
pp. 35-56
Keyword(s):  
Financial Stability ◽  
Basel Ii ◽  
Regulatory Regime ◽  
Capital Regulation ◽  
Structured Finance ◽  
2008 Financial Crisis ◽  
Basel Accord ◽  
Financial Deregulation ◽  
Regulatory Bodies ◽  
Regulation Change

A most important consequence of de-regulation change has been the transit of banks’ behaviour from acting as financial intermediaries to taking the role as brokers in the structured finance market. The combined effects of financial deregulation, rapid technological change, the evolution of the banking function, and the increasing complexity and diversity of finance activities has left regulatory bodies grappling with the problem of designing appropriate prudential standards. This has been the rationale behind the evolution of capital regulation from the pre-Basel regulation to the 1988 Basel Accord (Basel I); the 1996 Basel I amendment; and then to the new Basel Accord (Basel II). The major thrust of this chapter is to discern the most appropriate and effective regulatory regime for the purposes of achieving financial stability of the system. Accordingly, the occurrence of the recent 2007-2008 financial crisis is raised to offer a preliminary appraisal of the effectiveness of Basel II.

scholarly journals PROSPECTS FOR ENSURING THE FINANCIAL SECURITY AND STABILITY OF THE BANKING SYSTEM OF AZERBAIJAN USING THE PRINCIPLES OF THE BASEL ACCORD (BASEL II)

2021 ◽  
pp. 2-4
Author(s):  
T. Garayev
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Basel Ii ◽  
Financial Security ◽  
Basel Accord

The article discusses some aspects of the application of the developed Basel II principles to improve measures to ensure financial stability and security of the banking system of Azerbaijan. The advantages of using this agreement and the effectiveness of its application within the banking system of Azerbaijan are considered.

Enhancing Cyber Risk Management with the Framework of ERM and Basel II

2011 ◽  
pp. 34-52
Author(s):  
Junji Hiwatashi
Keyword(s):  
Risk Management ◽  
Financial Services ◽  
Financial Stability ◽  
Basel Ii ◽  
Sustainable Growth ◽  
Basel Accord ◽  
Return On Equity ◽  
Customer Base ◽  
Enterprise Risk ◽  
Cyber Risk

Information technology (IT) has been rapidly developed to provide financial services for customers via the Internet. This service is available 24 hours a day, 7 days a week across borders. On the other hand, technology-oriented financial services may face various cyber risks such as disruption caused by natural disasters and terrorist attacks, impersonation and other events stemming from unauthorized access, and theft or alteration of data. Once these events occur, they can affect not only companies such as financial institutions but also their stakeholders (e.g. customers) and financial stability. These events lead to indirect effects such as lawsuits and a bad reputation losing a sound customer base immediately. Thus, it is critical to enhance cyber risk management in advance before the nightmare happens, in order to enjoy the benefits of IT. This chapter introduces practical methods of enhancing cyber risk management efficiently and effectively with the framework of Enterprise Risk Management (ERM) and Basel Accord II (Basel II). It aims to show how to enhance cyber risk management, as well as efficiency, so that sustainable growth is achieved with a balance between risk and return or risk-adjusted return on equity.

scholarly journals INTERNATIONAL STANDARDS FOR BANK CAPITAL REGULATION

2021 ◽  
Vol 1 (36) ◽  
pp. 35-45
Author(s):  
V. Kovalenko ◽  
S. Sheludko ◽  
N. Radova ◽  
F. Murshudli ◽  
K. Gonchar
Keyword(s):  
Financial Crisis ◽  
Economic Crisis ◽  
Financial Stability ◽  
International Standards ◽  
Capital Adequacy ◽  
Capital Regulation ◽  
Bank Capital ◽  
Banking Supervision ◽  
New Paradigm ◽  
Bank Capital Regulation

The paper analyzes the evolution of the introduction of international standards for bank capital regulation. The aim of the research is to study international standards for bank capital regulation and their impact on financial stability and sustainability of domestic banking systems. The 2007—2009 Global Financial Crisis was perhaps the greatest banking and financial crisis since bank failures and the financial panic of the Great Depression in early 1930s. According to academics and professionals, there has been much debate over the last decade as to whether the 2007—2009 banking crisis was primarily a solvency crisis or a liquidity crisis. Capital adequacy of banks today is the main indicator of increasing society’s confidence in banking systems. The flexible and balanced implementation of Basel Committee on Banking Supervision (BCBS) recommendations on the assessment of bank capital adequacy is of particular importance in the context of the deepening economic crisis caused by COVID-19 quarantine restrictions. Regulation of bank capital is primarily settles by the ability to execute basic functions inherent in it. A number of shocks in connection with the crisis require the renewal and search for a new paradigm of regulation, which today is focused on achieving financial stability, overcoming pro-cyclicality, especially in the banking sector. One of the latest developments in the field of bank capital regulation has been the implementation of international banking supervision standards recommended by BCBS, which have been transformed from Basel I, Basel II, Basel III, Basel 3.5 to Basel IV. The new ideology suggests that in times of financial and economic crisis or in anticipation of growing uncertainty in the economy, it is necessary to abandon the idea of bank capital management and the creation of financial reserves to maintain liquidity and stability of financial institutions. These measures will not be able to protect the bank from default and bankruptcy. This ideology has become a new paradigm of effective banking regulation, which can be formulated as an accepted set of three vectors: risk; risk management; risk-oriented supervision.

Financial Deregulation

2021 ◽  
Keyword(s):  
Twentieth Century ◽  
Financial Markets ◽  
Financial Regulation ◽  
Developed Countries ◽  
Regulatory Regime ◽  
Financial Repression ◽  
Bretton Woods ◽  
Archival Material ◽  
Financial Deregulation ◽  
Depth Analysis

A wave of liberalization swept the end of the twentieth century. From the 1970s and 1980s onwards, most developed countries have passed various measures to liberalize and ‘modernize’ the financial markets. Each country had its agenda, but most of them have experienced, to a different extent, a change in regulatory regime. This change, often labelled deregulation and associated with the advent of neoliberalism, was sharply contrasting with the previous era, the Bretton Woods system, which has sometimes been portrayed as an era of ‘financial repression’. On the other hand, a quick glance at financial regulation today, at the amount of paper it produces, at its complexity, at the number of people involved, and at the resources invested in it, is enough to say that, somehow, there is more regulation today than ever before. In the new system, financial regulation has taken unprecedented importance. As more archival material is becoming available, a better understanding of the fundamental changes in the regulatory environment towards the end of the twentieth century is now possible. What kind of change exactly was deregulation? Did competition between financial regulators lead to a ‘race to the bottom’ in regulation? Is deregulation responsible for the recurring financial crises which seem to have characterized the international financial system since the 1980s? The movement towards a more liberal regulatory regime was neither linear nor simple. This book—a collection of chapters studying deregulation in various countries and contexts—examines the national and international pathways of deregulation by providing an in-depth analysis of a short but crucial period in a few major countries.

Theories of Financial Regulation

2014 ◽  
pp. 1-15
Keyword(s):  
Financial Stability ◽  
Financial Regulation ◽  
Self Regulation ◽  
Policy Makers ◽  
Developed Economies ◽  
Financial Deregulation ◽  
Regulatory Approach ◽  
Pros And Cons ◽  
And Control ◽  
Regulatory Theories

There has been a long-standing debate about the pros and cons of two modes of financial regulation: command and control and self-regulation. These two regulatory modes have been favored by policy-makers and the dominant regulatory theories for decades in developed economies such as US, UK, and Australia. The design of financial regulations, consequently, has oscillated between these two modes during the pre-deregulation and financial deregulation periods in those developed economies. However, a third regulatory approach aimed at maintaining financial stability, which is the vital issue during post-GFC period, is introduced to policy-makers and a broad swath of other constituencies in this chapter.

Drivers of Financial Deregulation in Japan

2021 ◽  
pp. 58-75
Author(s):  
Eiji Hotori
Keyword(s):  
United States ◽  
Financial Market ◽  
Financial Innovation ◽  
The United States ◽  
Japanese Government ◽  
Regulatory Regime ◽  
Capital Movement ◽  
Government Bonds ◽  
Financial Deregulation ◽  
Over Time

This chapter aims to identify the real drivers of financial deregulation in Japan. Japan’s financial deregulation drivers clearly changed over time. In the late 1960s and the early 1970s, the liberalization of capital movement in Japan caused an administrative shift from its conventional rigid regulatory regime. From the mid-1970s, a rapid increase of Japanese government bonds issuances, as well as financial innovation, acted to remove the barriers between the banking and the securities businesses. From the mid-1980s, the pressure from the United States, as well as from domestic depositors and banks, urged the Japanese financial authorities to liberalize the financial market. It is evident that the drivers of financial deregulation in Japan in the 1980s were not only the pressure from abroad (as generally accepted), but that the deregulation was also driven by domestic interests including fiscal reasons.

scholarly journals Fake Qualifications and the Challenge of regulating Higher Education in Southern Africa

2018 ◽  
Vol 6 (1) ◽  
pp. 107 ◽  
Author(s):  
Ignasio M. Jimu
Keyword(s):  
Higher Education ◽  
Southern Africa ◽  
Education System ◽  
General Public ◽  
Higher Education Institutions ◽  
Regulatory Regime ◽  
Ethical Standards ◽  
Regulatory Bodies ◽  
Legitimate Expectations ◽  
The Subject

This article examines the prevalence and implications of fake qualifications and the need for an effective regulatory regime to contain fake higher education qualifications. Fake qualifications by definition refer to false academic and professional credentials, regardless of the source, which means they may be acquired from illegitimate institutions, superficially legitimate institutions or through illegitimate means from legitimate institutions. The qualifications are in this sense illegitimate both in the manner in which they are obtained and also in terms of what they signify. The research for this article shows that the clandestine nature of the production and issuance and its global reach make it difficult to quantify, but also to control the use of fake qualifications and to manage their impact locally, nationally and globally. Drawing from several cases, it is apparent that the phenomenon of fake qualifications defies the integrity and legitimate expectations from an education system and is a serious challenge to education and ethical standards. It is further argued that given the challenges presented by the proliferation of fake qualifications generally, and in southern Africa in particular, it is imperative for higher education institutions, regulatory bodies, employers and the general public to develop a keen interest in the subject of fake qualifications and to cooperate in order to contain the menace.

Part A Regulatory Matters, 8 The Market Regulators

2015 ◽  
Author(s):  
Proctor Charles
Keyword(s):  
Financial Services ◽  
Financial Stability ◽  
Credit Crunch ◽  
Market Regulation ◽  
European Level ◽  
Banking Market ◽  
Bank Of England ◽  
Regulatory Bodies ◽  
The Uk

This chapter explains the various authorities involved in UK banking market regulation. It first considers the role of the UK Financial Services Authority (FSA), including its statutory objectives and powers under the Financial Services and Markets Act 2000. It then discusses the role of the Bank of England in the fields of financial stability and monetary policy; the role of Her Majesty's Treasury; the development of regulatory bodies at the European level, largely in response to the credit crunch and the problems to which it gave rise; and some recent international initiatives.

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