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Unpublished Paper
The Great Recession and the Future of International Banking Cooperation
ExpressO (2010)
  • Webb McArthur
Abstract

The credit crisis of 2008 will likely produce reforms of the financial regulatory structure in the U.S., rearranging powers between regulators, implementing new rules governing the sort of risk financial institutions may assume, and instituting new consumer-oriented protections. The crisis made it clear that transparency and coordination of our regulation is crucial to the wellbeing of the U.S. economy. It follows that we should reexamine our coordination on the international level, as the world grows more, not less, interconnected. The current international standards for financial institutions set out in the Basel II Framework have proven to be ineffective, and the Committee on Banking Supervision should reexamine the requirements to make coordination worth the effort. While the Committee need not replace national discretion on bank risk, it should set out a common structure in which national regulators can implement standards that make sense for each respective nation. Necessary reforms include improved definitions of capital and financial instruments, less flexible capital requirements based on institution type, and real international accounting standards.

Disciplines
Publication Date
May 20, 2010
Citation Information
Webb McArthur. "The Great Recession and the Future of International Banking Cooperation" ExpressO (2010)
Available at: http://works.bepress.com/webb_mcarthur/1/