What is it about?
This paper highlights the importance of regulatory measures aimed at ensuring that whilst objectives and rationales of financial regulation are realised, do not subject smaller and less complex institutions to undue regulatory burdens which place them at a (particularly) significant level of competitive disadvantage (in contrast to their counterparts in other jurisdictions) - such that they are compelled by reasons of such disadvantage or regulatory burdens to engage in riskier based actions.
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Why is it important?
The need to facilitate the intended goals and objectives of financial regulation
Perspectives
The need for revisions to the Basel risk based capital adequacy framework have become necessary - not only as a result of the increased need for, and role of other complementary standards and measures - such as leverage ratios, but also in view of the fact that Pillar One (minimum capital requirements) needs to be supported by supervisory review - as well as market discipline (which embraces disclosure requirements). Hence coordination, prompt and timely communication between national supervisors in different jurisdictions is necessary to facilitate a certain degree of consistency and uniformity in the application of regulations and principles.
Prof Marianne Ojo
Northwestern University
Read the Original
This page is a summary of: Successfully Implementing Major Financial Stability Regulatory Reforms: The Risk Weighting Based Controversy (Basel v. Dodd Frank) and the Role of National Supervisors, SSRN Electronic Journal, Social Science Electronic Publishing,
DOI: 10.2139/ssrn.1870209.
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