Forbes: Will Financial Regulation Trash Global Economic Security?

Mirtchev, A. (2012, March 29). Will Financial Regulation Trash Global Economic Security? Forbes.

ForbesUnder the auspices of the Financial Stability Board, more than 30 recommendations have been set out as part of a massive and far-reaching G-20 financial regulatory reform package to ostensibly minimize risk in the financial system and maximize consumer protection.

The new measures fall into several broad categories, including: 1) surveillance (systemic risk boards) 2) bank capital and liquidity (Basel III standards tightening the rules on the ratio of bank deposits to lending); 3) too big to fail (new thresholds for those designated as Systemically Important Financial Institutions); 4) capital markets (new requirements surrounding OTC derivative activity and the role of credit rating agencies); 5) compensation standards; and 6) reduced opportunities for regulatory arbitrage particularly with regard to the so-called shadow banking system.