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Pre-GFC Bank Behaviour Change and Basel Accords

Pre-GFC Bank Behaviour Change and Basel Accords

Copyright: © 2014 |Pages: 22
ISBN13: 9781466659506|ISBN10: 1466659505|EISBN13: 9781466659513
DOI: 10.4018/978-1-4666-5950-6.ch003
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MLA

Siqiwen Li. "Pre-GFC Bank Behaviour Change and Basel Accords." Emerging Trends in Smart Banking: Risk Management Under Basel II and III, IGI Global, 2014, pp.35-56. https://doi.org/10.4018/978-1-4666-5950-6.ch003

APA

S. Li (2014). Pre-GFC Bank Behaviour Change and Basel Accords. IGI Global. https://doi.org/10.4018/978-1-4666-5950-6.ch003

Chicago

Siqiwen Li. "Pre-GFC Bank Behaviour Change and Basel Accords." In Emerging Trends in Smart Banking: Risk Management Under Basel II and III. Hershey, PA: IGI Global, 2014. https://doi.org/10.4018/978-1-4666-5950-6.ch003

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Abstract

A most important consequence of de-regulation change has been the transit of banks’ behaviour from acting as financial intermediaries to taking the role as brokers in the structured finance market. The combined effects of financial deregulation, rapid technological change, the evolution of the banking function, and the increasing complexity and diversity of finance activities has left regulatory bodies grappling with the problem of designing appropriate prudential standards. This has been the rationale behind the evolution of capital regulation from the pre-Basel regulation to the 1988 Basel Accord (Basel I); the 1996 Basel I amendment; and then to the new Basel Accord (Basel II). The major thrust of this chapter is to discern the most appropriate and effective regulatory regime for the purposes of achieving financial stability of the system. Accordingly, the occurrence of the recent 2007-2008 financial crisis is raised to offer a preliminary appraisal of the effectiveness of Basel II.

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