The Policy Response: From the G20 Requests to the FSB Roadmap; Working Towards the Proposals of the Basel Committee

Patrizia Baudino, European Central Bank

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