The Policy Response: From the G20 Requests to the FSB Roadmap; Working Towards the Proposals of the Basel Committee
Patrizia Baudino, European Central Bank
Foreword
Introduction to 'Basel III and Beyond'
The Big Financial Crisis
The Policy Response: From the G20 Requests to the FSB Roadmap; Working Towards the Proposals of the Basel Committee
The New Definition of Regulatory Capital
A New Framework for the Trading Book
Counterparty Credit Risk and Other Risk-Coverage Measures
Tools for Mitigating the Procyclicality of Financial Regulation
The Regulatory Leverage Ratio
The New Framework for Liquidity Risk
The Discipline of Credit Rating Agencies
Systemically Important Banks
Regulating Remuneration Schemes in Banking
Crisis Management and Resolution
The Impact of the New Regulatory Framework
A Brazilian Perspective on Basel III
A New Institutional Framework for Financial Regulation and Supervision
Structural Regulation Redux: The Volcker Rule
The Changing Uses of Contingent Capital under the Basel III Framework
2.1 Introduction
This article was first published as a chapter in Basel III and Beyond on July 27, 2011, by Risk Books.
This chapter provides an overview of the various supervisory and regulatory policies for the financial sector that have been set in motion following the financial crisis that started in 2007. In particular, it discusses the overall policy response that the G20, alongside the Financial Stability Board (FSB) and its member bodies, designed in order to address the shortcomings of pre-crisis financial supervision and regulation. The policy changes described in the chapter cover both the global institutional arrangements and the nature and scope of regulation and supervision.
Substantial changes to the institutional structure at a national and international level have been undertaken since 2007, not only to match the needs generated by the regulatory changes, but also to respond to a call for more inclusiveness and better cross-border cooperation among supervisory authorities. The latter was a response to the systemic impact of a financial crisis that originated in a few countries but had global repercussions. This chapter presents these changes within the
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