Basel II through the eyes of Rousseau

EDITORIAL LETTER | ELLEN DAVIS

This hit me when I was attending the Institute of International Finance's spring membership meeting in Madrid. Certainly, the IIF is just one trade associations working with regulators. But there was something in the air there.

Jean Jacques Rousseau, the 18th century philosopher, said: "The people, being subject to the laws, ought to be their author: the conditions of society ought to be regulated solely by those who come together to form it."

Now, no-one would ever argue that banks should be in charge of their own regulation. For example, many firms earned big bucks devising ways to get around Basel I. But now that they have had a hand in building Basel II, they have more of an incentive to abide by its code.

Regulators have also learned the importance of listening – that their ideas for supervision can often have unintended consequences in the 'real world'. And that with a bit of dialogue, the regulators can often accomplish what they intend to, much more effectively. This new dialogue is, indeed, a platform for a 21st century financial system.

  • LinkedIn  
  • Save this article
  • Print this page  

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: