EconPapers    
Economics at your fingertips  
 

Reform of Financial Supervisory and Regulatory Regimes: What has Been Achieved and What is Still Missing

Takatoshi Ito ()

International Economic Journal, 2011, vol. 25, issue 4, 553-569

Abstract: Weak financial supervision was partly responsible for the Global Financial Crisis (GFC) of 2007--2009. The liquidity risk in the special purpose subsidiaries was not well recognized in regulation; there were large financial institutions that escaped rigorous supervision; and the concept of ‘too-big-to-fail’ caused moral hazard in management. This paper examines whether these shortcomings were adequately addressed in the post-crisis reform of the global financial architecture. The United States overhauled the supervision framework, which includes shifting supervision authorities of systemically important financial institutions (SIFIs) to the Federal Reserve and increasing capital requirement on those SIFIs. Similar reforms of supervision frameworks have been implemented in European countries. The Bank of International Settlements (BIS) also proposed Basle III, significantly increasing capital requirements, and modifying risk weights. Despite all these efforts, one key component on the reform agenda is not adequately addressed, namely the procedure to have an orderly resolution mechanism for a large financial institution. Without the procedure, the too-big-to-fail problem will continue to cast a shadow over the global financial architecture.

Date: 2011
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1080/10168737.2011.636620 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:intecj:v:25:y:2011:i:4:p:553-569

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RIEJ20

Access Statistics for this article

International Economic Journal is currently edited by Jaymin Lee Editor

More articles in International Economic Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2019-08-11
Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:553-569