New Regulation and the New World of Global Banking

National Institute Economic Review, 216(1), April 2011

15 Pages Posted: 26 May 2013

See all articles by Stephen G. Cecchetti

Stephen G. Cecchetti

Brandeis International Business School; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Dietrich Domanski

Bank for International Settlements (BIS)

Goetz von Peter

Bank for International Settlements - Research and Policy Analysis

Date Written: March 15, 2011

Abstract

Global banks are changing. With a new set of rules come new business models. We review the international dimension of the financial crisis, centring on cross-border losses and cross-currency funding problems that prompted authorities to adopt wide-ranging rescue measures and liquidity operations. Against this background, we proceed to examine the regulatory response, focusing on the Basel III framework and the ongoing work of the Basel Committee and Financial Stability Board regarding the amount of capital banks are required to hold, restrictions on maturity transformation on banks' balance sheets and proposals to mitigate the risks posed by systemically important financial institutions. Our conclusion is that capital and liquidity regulation will have distinctly different effects on the international organisation of banks. Liquidity regulation, especially when applied locally, has the greatest potential to reshape the global banking landscape.

Keywords: Global banking, bank funding, liquidity regulation, Basel III

JEL Classification: F36, G01, G21, G28, H12

Suggested Citation

Cecchetti, Stephen G. and Domanski, Dietrich and von Peter, Goetz, New Regulation and the New World of Global Banking (March 15, 2011). National Institute Economic Review, 216(1), April 2011. Available at SSRN: https://ssrn.com/abstract=2269847

Stephen G. Cecchetti

Brandeis International Business School ( email )

415 South Street
Waltham, MA 02453
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
212-720-8629 (Phone)
212-720-2630 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Dietrich Domanski

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Goetz Von Peter (Contact Author)

Bank for International Settlements - Research and Policy Analysis ( email )

CH-4002 Basel, Basel-Stadt
Switzerland
+ 41 61 280 8840 (Phone)

HOME PAGE: http://www.bis.org/author/goetz_von_peter.htm

Register to save articles to
your library

Register

Paper statistics

Downloads
36
Abstract Views
329
PlumX Metrics