Basel II as a casualty of the global financial crisis

Moosa, I 2010, 'Basel II as a casualty of the global financial crisis', Journal of Banking Regulation, vol. 11, no. 2, pp. 95-114.


Document type: Journal Article
Collection: Journal Articles

Title Basel II as a casualty of the global financial crisis
Author(s) Moosa, I
Year 2010
Journal name Journal of Banking Regulation
Volume number 11
Issue number 2
Start page 95
End page 114
Total pages 20
Publisher Palgrave Macmillan Ltd.
Abstract The global financial crisis has reinforced the pre-existing belief in the weaknesses of the Basel II Accord. It is argued that capital-based regulation and the Basel-style capital regulation cannot deal with financial crises and that attention should be paid to liquidity and leverage. The Accord is criticised, in view of what happened during the crisis, for allowing the use of bank internal models to determine capital charges, for boosting procyclicality of the banking industry, for reliance on rating agencies and for being an exclusionary, discriminatory and a one-size-fits-all approach. It may not be possible to salvage Basel II, and the way forward is perhaps to abandon the idea of unified international financial regulation.
Keyword(s) Basel II
Financial regulation
Global financial crisis
Leverage
Liquidity
Rating agencies
DOI - identifier 10.1057/jbr.2010.2
Copyright notice © 2010 Macmillan Publishers Ltd.
ISSN 1745-6452
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