Beyond the Horizon of Banking Regulation: What to Expect from Basel IV?

18 Pages Posted: 26 Dec 2016

See all articles by Luca Amorello

Luca Amorello

Harvard Law School; Cleary Gottlieb Steen & Hamilton LLP; Goethe University Frankfurt - House of Finance

Date Written: December 21, 2016

Abstract

Since its inception, the Basel III international regulatory framework for banks has manifested a number of weaknesses in tackling the idiosyncratic and systemic risks arising from highly leveraged credit institutions. The continuing reliance on internal rating models to calculate capital requirements and the loss-absorbing capacity of prudential buffers have come under severe scrutiny by competent authorities. Against this backdrop, rumors of new structural reforms in banking regulation have started spreading into the G20 financial markets. The re-modulation of international capital and disclosure requirements for global banks — already labeled the “Basel IV package” — seems to be emerging, and the potential impact on the industry as a whole is likely to be significant. Sketching what might be the major elements of this new regulatory proposal is therefore critical for predicting how global banks will need to adjust their risk management and governance structure in the upcoming years.

Keywords: Basel III, Basel IV, Prudential Regulation, TLAC, Sovereign Risk, Operational Risk, Capital Requirements, G-SII, Capital Requirements, Credit Risk

JEL Classification: K22

Suggested Citation

Amorello, Luca, Beyond the Horizon of Banking Regulation: What to Expect from Basel IV? (December 21, 2016). Harvard International Law Journal, Vol. 58, Fall 2016, Available at SSRN: https://ssrn.com/abstract=2888960 or http://dx.doi.org/10.2139/ssrn.2888960

Luca Amorello (Contact Author)

Harvard Law School ( email )

1563 Massachusetts Avenue
Cambridge, MA 02138
United States
6179028781 (Phone)
6179028781 (Fax)

Cleary Gottlieb Steen & Hamilton LLP ( email )

One Liberty Plaza
New York, NY 10006
United States

Goethe University Frankfurt - House of Finance ( email )

Grüneburgplatz 1
Frankfurt am Main, DE 60323
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
594
Abstract Views
1,846
rank
56,153
PlumX Metrics