Global Bank Regulation

Global Bank Regulation

Principles and Policies

1st Edition - October 22, 2009

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  • Authors: Heidi Mandanis Schooner, Michael Taylor
  • Hardcover ISBN: 9780126410037
  • eBook ISBN: 9780080925806

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Global Bank Regulation: Principles and Policies covers the global regulation of financial institutions. It integrates theories, history, and policy debates, thereby providing a strategic approach to understanding global policy principles and banking. The book features definitions of the policy principles of capital regularization, the main justifications for prudent regulation of banks, the characteristics of tools used regulate firms that operate across all time zones, and a discussion regarding the 2007-2009 financial crises and the generation of international standards of financial institution regulation. The first four chapters of the book offer justification for the strict regulation of banks and discuss the importance of financial safety. The next chapters describe in greater detail the main policy networks and standard setting bodies responsible for policy development. They also provide information about bank licensing requirements, leading jurisdictions, and bank ownership and affiliations. The last three chapters of the book present a thorough examination of bank capital regulation, which is one of the most important areas in international banking. The text aims to provide information to all economics students, as well as non-experts and experts interested in the history, policy development, and theory of international banking regulation.

Key Features

  • Defines the over-arching policy principles of capital regulation
  • Explores main justifications for the prudent regulation of banks
  • Discusses the 2007-2009 financial crisis and the next generation of international standards of financial institution regulation
  • Examines tools for ensuring the adequate supervision of a firm that operates across all time zones
  • Readership

    Academics and advanced-level students interested in the theory, history, and policy development of international banking regulation

    Table of Contents

    • Introduction: The Global Financial System and the Problems of Regulation

      1. The Changing Nature of Banks


      Money, Credit Creation, and Fractional Reserve Banking

      Financial Innovation and the Changing Nature of Banks

      Three Distinctive Features of Modern Banking


      Further Reading

      2. Panics, Bank Runs, and Coordination Problems

      The Structure of Banks’ Balance Sheets

      Coordination Problems and Bank Runs

      Panic and Contagion in Modern Financial Systems

      Free Riders and Regulation


      Further Reading

      3. Collapsing Dominos and Asset Price Spirals

      Collapsing Dominos

      Asset Price Spirals

      The Global Financial Crisis of 2007–2009


      Further Reading

      4. The Financial Safety Net and Moral Hazard

      The Financial Safety Net

      Moral Hazard

      Is There an Alternative?


      Further Reading

      5. Sources of Financial Regulation

      National Laws

      International Law


      Further Reading

      6. Bank Licensing and Corporate Governance

      The Purpose of Bank Licensing

      The Fundamentals of Bank Licensing

      Fitness and Propriety of Bank Management

      Significant Changes in Ownership

      Choice of Bank Charter

      Cross-Border Issues

      Principles of Sound Corporate Governance

      Sarbanes-Oxley Act of 2002


      Further Reading

      7. Bank in Corporate Groups: Ownership and Affiliation

      Bank-Commerce Linkages

      The Separation of Banking and Finance

      Changes to Structural Regulation of the Combination of Banking and Other Financial Services


      Further Reading

      8. The Rationale for Bank Capital Regulation

      Why Regulate Bank Capital?

      Leverage Ratios

      Risk-Weighted Capital

      Criticisms of the Basel Capital Accord


      9. The New Capital Adequacy Framework: Basel II and Credit Risk

      The Standardized Approach

      The Internal Ratings-Based (IRB) Approaches

      Dealing with Financial Innovation


      Further Reading

      10. The New Capital Adequacy Framework: Basel II and Other Risks

      Market Risk

      Operational Risks

      Pillar 2 Risks


      Further Reading

      11. Direct Limits on Banks’ Risk Taking

      Credit Concentration Risk

      Liquidity Risk


      12. Consolidated Supervision and Financial Conglomerates

      What Is Consolidated Supervision?

      The Need for Consolidated Supervision

      Consolidated Supervision of Cross-Border Banks

      Financial Conglomerates


      13. Anti-Money Laundering

      What Is Money Laundering?

      The Impact on Banks

      International Response

      Banco Delta Asia Case Study


      Further Reading

      14. Bank Insolvency

      The Goals and Types of Bank Insolvency Regimes

      Legal Framework for Bank Insolvency

      Determination of Insolvency

      Administration Orders and Conservatorships



      Further Reading

      15. Institutional Structures of Regulation

      Institutional and Functional Regulation

      Rise of the Integrated Regulator

      Twin Peaks (Objectives) Approach

      Role of the Central Bank in Bank Supervision

      Evaluation of Structural Reforms


      Further Reading

      16. Regulation After the Global Financial Crisis

      The Causes of the Crisis

      Rethinking the Assumptions of Regulation

      New Directions in Capital Adequacy

      More Radical Options

      The International Dimension


      Appendix: Introduction to Regulation and Market Failure


    Product details

    • No. of pages: 352
    • Language: English
    • Copyright: © Academic Press 2009
    • Published: October 22, 2009
    • Imprint: Academic Press
    • Hardcover ISBN: 9780126410037
    • eBook ISBN: 9780080925806

    About the Authors

    Heidi Mandanis Schooner

    Affiliations and Expertise

    Columbus School of Law, The Catholic University of America, Washington D.C.

    Michael Taylor

    Affiliations and Expertise

    International Monetary Fund

    Ratings and Reviews

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