 De-globalising bank regulationMario Tonveronachi ()
PSL Quarterly Review, 2013, vol. 66, issue 267, 371-385 Abstract: The recent crisis has promoted a rethinking of financial globalisation, a revision that has also partially interested some official circles. National supervisors have often reacted to the crises of cross-border banks by ring fencing local interests. Some proposals (e.g. the Vickers Report and the Fed's subsidiarisation of US establishments of foreign banks) de facto imply a partial de-globalisation of both banks and their supervision. Orthodox regulators and large banks point, on the contrary, to deepen globalisation by means of more homogeneous international standards for prudential regulation and bank resolution. After all, that was the original message of the G20. The champions of globalisation argue that the new rules on prudential regulation and bank resolution will make bank crises less frequent and serious, while shielding public finances if they occur. Much of the current debate focuses on whether the new rules, especially for bank capitalisation, are strict enough to deliver financial stability. The present paper objects to focusing regulation and supervision solely on stability, to linking stability only to prudential rules and to enhancing the international harmonisation of those rules. The criticism, based on a simple exercise, looks at the structural heterogeneities that characterise both the banking systems and the growth trajectories of some developed economies. Homogenous rules, if effective, would produce inflationary or deflationary strains. If banks must serve economic growth, regulation should found financial stability mainly on structural measures, and supervision should be transformed into one of the policy tools flexibly looking after local conditions. Keywords: global banking; financial regulation; de-globalisation; Minsky (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:psl:pslqrr:2013:42 Ordering information: This journal article can be ordered from Access Statistics for this article PSL Quarterly Review is currently edited by Alessandro Roncaglia and Carlo D'Ippoliti More articles in PSL Quarterly Review from Economia civile |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.