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Banking reform: Do we know what has to be done?

There have been a lot of proposals for new legislation and some have already been implemented. However, many questions remain. Has enough been done to reduce the chance of another financial crisis? How fast should new rules be implemented? What should happen during the transition period? Are governments overreaching and is the new regulation going to stifle growth in the financial sector? This debate is about these questions.

Commentaries

Banking reform: Do we know what has to be done?

Wouter den Haan, 30 November 2012

This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?" Better regulation is important for reducing the chances of another major financial crisis, but better regulation may also be an essential factor in re-establishing confidence in the financial sector itself. Indeed, it is thought that such confidence may be an essential...
A blueprint for macroprudential policy in the banking union

Enrico Perotti, 13 December 2012

This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?" The Global Crisis that started in 2008 and the more recent Eurozone Crisis have made one thing abundantly clear. The ‘business as usual’ approach to banking regulation is not good enough. The traditional approach focused exclusively on ‘microprudential’...
Implementation of Basel III in the US will bring back the regulatory arbitrage problems under Basel I

Takeo Hoshi, 23 December 2012

This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?" In the aftermath of the global financial crisis, many countries have been redesigning their financial regulatory frameworks. In the US, the Dodd Frank Act of 2010 specified the directions for new financial regulations. The US financial regulatory agencies, including those that...
Meaningful banking reform and why it is so unlikely

Charles W Calomiris, 7 January 2013

This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?" In the decades leading up to the recent banking crisis, regulators and supervisors consistently failed in three key areas: They did not measure banks’ risks credibly or accurately, or set sufficient minimum equity capital buffers in accordance with those risks so that...
Shadow banking: Economics and policy priorities

Stijn Claessens, Zoltan Pozsar, Lev Ratnovski, Manmohan Singh, 10 January 2013

This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?" The past decade has witnessed rapid growth in a distinct form of financial intermediation: shadow banking. Today, in many advanced countries shadow banking rivals the traditional banking system. Since shadow banking is a recent phenomenon, its economic role is not yet well...
A better way to design global financial regulation

Viral Acharya, T Sabri Öncü, 11 January 2013

Over the last year, it has seemed as though not a single day passed without an internationally prominent figure – economist or politician – urging effective implementation and better coordination of the new financial regulations currently under construction around the globe. The G20 finance ministers and central bank governors were a new addition to the choir who, at their...
Have we solved 'too big to fail'?

Andrew G Haldane, 15 January 2013

No. That is not my pessimistic verdict; it is the market’s. Prior to the crisis, the 29 largest global banks benefitted from just over one notch of uplift from the ratings agencies due to expectations of state support. Today, those same global leviathans benefit from around three notches of implied support. Expectations of state support have risen threefold since the crisis began. This...
Putting time and space back into finance

Biagio Bossone, 21 January 2013

This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?" The European debt crisis had almost led the world to forget about the wounds and ravages caused by the collapse of global finance only shortly before. In 2011, the Indignados and Wall Street Occupiers brought the issue back on the table, but this swept away once again as they...
The inadequacy of capital adequacy regulations and a public equity alternative

Edward J Kane, 29 January 2013

This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?" A financial institution’s capital is defined as the difference between the value of its asset and liability positions. The idea that capital requirements can serve as a stabilisation tool is based on the presumption that, other things being equal, the strength of an...