Ojo, Marianne (2011): Financial stability, new macro prudential arrangements and shadow banking: regulatory arbitrage and stringent Basel III regulations.
Download (249kB) | Preview
Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules?
As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.”
This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced.
|Item Type:||MPRA Paper|
|Original Title:||Financial stability, new macro prudential arrangements and shadow banking: regulatory arbitrage and stringent Basel III regulations|
|Keywords:||counter party risks; liquidity; European Systemic Risk Board; stability; systemic risk; Shadow Banking; central banks; regulatory arbitrage; OTC derivatives; European Central Bank; supervision; coordination|
|Subjects:||E - Macroeconomics and Monetary Economics > E0 - General
D - Microeconomics > D0 - General
E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy
K - Law and Economics > K2 - Regulation and Business Law
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty
G - Financial Economics > G0 - General > G01 - Financial Crises
|Depositing User:||Dr Marianne Ojo|
|Date Deposited:||07 Jun 2011 20:27|
|Last Modified:||24 Aug 2016 15:13|
Basel Committee on Banking Supervision, “Consultative Document, The Internal Ratings Based Approach: Supporting Document to the New Basel Capital Accord” January 2001, Bank for International Settlements Publications http://www.bis.org/publ/bcbsca04.pdf
BRIEF, „Deutsche Bank CFO Says Concerned New Basel Rules Allow Shadow Banking System Whilst Constraining Bank Sector“ http://www.finanznachrichten.de/nachrichten-2011-05/20264700-brief-deutsche-bank-cfo-says-concerned-new-basel-rules-allow-shadow-banking-system-020.htm
Commission Communication, “From Financial Crisis to Recovery: A European Framework for Action” COM (2008) 706 final 29 October 2008 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0706:FIN:EN:PDF
DIRECTIVE 2009/111/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 September 2009 amending Directives 2006/48/EC, 2006/49/EC and 2007/64/EC as regards banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management
DIRECTIVE 2006/48/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions
DIRECTIVE 2006/49/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 June 2006 on the capital adequacy of investment firms and credit institutions
European Central Bank, Financial Stability Review December 2010 <http://www.ecb.int/pub/pdf/other/financialstabilityreview201012en.pdf
Europa Press Releases, “European System of Financial Supervisors (ESFS): Why are New European Supervisory Authorities Needed?” http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/404
Financial Stability Board, “Implementing OTC Derivatives Market Reforms” Oct 2010 http://www.financialstabilityboard.org/publications/r_101025.pdf
Financial Stability Board, „Shadow Banking: Scoping the Issues (A Background Note of the Financial Stability Board) http://www.financialstabilityboard.org/publications/r_110412a.pdf
Pozsar et al, “Shadow Banking” Staff Report No 458, July 2010 < http://www.ny.frb.org/research/staff_reports/sr458.pdf>
Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union Macro Prudential Oversight of the Financial System and Establishing a European Systemic Risk Board. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:331:0001:0011:EN:PDF
Regulation (EU) No 1096/2010 of 17 November 2010: Conferring Specific Tasks Upon the European Central Bank Concerning the Functioning of the European Systemic Risk Board.
Available Versions of this Item
- Financial stability, new macro prudential arrangements and shadow banking: regulatory arbitrage and stringent Basel III regulations. (deposited 07 Jun 2011 20:27) [Currently Displayed]