Advanced Search
MyIDEAS: Login to save this article or follow this journal

Extending the Scope of Prudential Supervision: Regulatory Developments during and beyond the “Effective” Periods of the Post BCCI and the Capital Requirements Directives

Contents:

Author Info

  • Marianne Ojo

    ()
    (Center for European Law and Politics (ZERP), Oxford Brookes, University of Bremen)

Abstract

The main argument of this paper is, namely, the need for greater emphasis on disclosure requirements and measures – particularly within the securities markets. This is justified on the basis of lessons which have been drawn from the recent Financial Crises, one of which is the inability of bank capital requirements on their own to address funding and liquidity problems. The engagement of market participants in the corporate reporting process, a process which would consequently enhance market discipline, constitutes a fundamental means whereby greater measures aimed at facilitating prudential supervision could be extended to the securities markets. Furthermore, the paper illustrates how through Pillar 3, market participants like credit agencies can determine levels of capital retained by banks – hence their potential to rectify or exacerbate pro cyclical effects resulting from Pillars 1 and 2. Challenges encountered by Pillars 1 and 2 in addressing credit risk are reflected by problems identified with pro cyclicality, which are attributed to banks’ extremely sensitive internal credit risk models, the level of capital buffers which should be retained under Pillar Two. Such issues justify the need to give greater prominence to Pillar 3. In elaborating on Basel II’s pro cyclical effects, gaps which exist with internal credit risk model measurements, Basel II’s risk measurements, along with the increased prominence and importance of liquidity risks - as revealed by the recent financial crisis, and proposals which have been put forward to mitigate Basel II’s procyclical effects will be addressed.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.asers.eu/journals/jarle/jarle-issues.html
Download Restriction: no

Bibliographic Info

Article provided by ASERS Publishing in its journal Journal of Advanced Research in Law and Economics.

Volume (Year): I (2010)
Issue (Month): 1 (June)
Pages: 51-66

as in new window
Handle: RePEc:srs:jarle1:5:v:1:y:2010:i:1:p:51-66

Contact details of provider:
Web page: http://www.asers.eu/journals/jarle.html

Related research

Keywords: Capital Requirements Directive (CRD); Post BCCI Directive; prudential supervision; liquidity; capital; maturity mismatches; regulation;

Other versions of this item:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:srs:jarle1:5:v:1:y:2010:i:1:p:51-66. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Madalina Constantinescu).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.