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
In the current search for measures to eliminate or reduce the negative externality generated by systemically important financial institutions (SIFIs), prospective options available to regulators include structural solutions. These are mandated constraints and limits on the activities that a financial institution may exercise, on the investments it may undertake and on its size and financial structure.
However, this approach has not enjoyed much consensus among policymakers thus far. Indeed, as described in Chapter 10, most efforts in the ongoing process of reforming the international regulatory framework have been focused on the enhancement of the loss-absorbing capacity of financial firms (in order to reduce the likelihood of distress) and on the development of better resolution mechanisms (to limit the spillover effects of any single default event on the financial system as a whole). Risk-based prudential measures remain at the forefront, as the starting point, to tackle the issue of systemically important institutions.
The Financial Stability Board endorsed this view