Post-Crisis International Financial Regulatory Reforms: A Primer

69 Pages Posted: 27 Apr 2020

See all articles by Claudio E. V. Borio

Claudio E. V. Borio

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

Marc Farag

Bank of England - Financial Stability Assessment Division

Nikola A. Tarashev

Bank for International Settlements (BIS) - Monetary and Economic Department

Date Written: April 23, 2020

Abstract

This paper reviews post-crisis financial regulatory reforms, examines how they fit together and identifies open issues. Specifically, it takes stock of the salient new features of bank and CCP international standards within a unified analytical framework. The key notion in this framework is "shock-absorbing capacity", which is higher when (i) there is less exposure to the losses that a shock generates and (ii) there are more resources to absorb such losses. How do the reforms strengthen this capacity, individually and as a package? Which areas merit further attention? We argue that, given the political economy pressures and technical obstacles that the reforms have faced, as well as the inherent uncertainty about the reforms' effects, it is important to maintain a conservative regulatory approach. A higher cost of balance sheet space is a healthy side effect of the backstops underpinning such an approach.

Keywords: bank regulation, CCPs, asset managers, macroprudential

JEL Classification: G21, G23, G28

Suggested Citation

Borio, Claudio E.V. and Farag, Marc and Tarashev, Nikola A., Post-Crisis International Financial Regulatory Reforms: A Primer (April 23, 2020). BIS Working Paper No. 859, Available at SSRN: https://ssrn.com/abstract=3584707

Claudio E.V. Borio (Contact Author)

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

CH-4002 Basel, Basel-Stadt
Switzerland

Marc Farag

Bank of England - Financial Stability Assessment Division

London
United Kingdom

Nikola A. Tarashev

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

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