How Effective is Global Financial Regulation?
Repository Usage Stats
After the Global Financial Crisis 2007-2010, the effectiveness of global financial regulation, as promoted by the Basel Committee on Banking Supervision, has been questioned. Conventional minimum capital requirements like the tier capital ratio seem to have failed in reducing the risk of bank failures. In light of the Basel III Accord, new and potentially better financial ratios are being developed to prevent future banking crises from happening. This paper compares bindingness and effectiveness characteristics of capital and liquidity ratios from the Basel I and III frameworks. It entails a series of descriptive and regression analyses to examine these ratios’ power to detect and mitigate bank failures. Surprisingly, the current tier capital ratio seems to denote an effective measure of bank failures in contrast to two newly developed measures, the common equity ratio and the net stable funding ratio.
tier capital ratio
common equity ratio
net stable funding ratio
More InfoShow full item record
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
Rights for Collection: Undergraduate Honors Theses and Student papers