The Role of the Basle Standards in International Banking Supervision

This paper analyses the emerging international supervisory regime for banking institutions that operate on a transnational basis. It focuses on the basle framework as an institutional regime of norms and principles that govern international financial relations amongst the g10 countries. This paper argues that the basle committee on banking supervision has played a significant role in developing principles of sound regulatory practice for national supervisors to adopt in their jurisdictions. The increasing deregulation and liberalisation of international financial markets necessitates effective international minimum standards of supervisory practice to regulate the international activities of banking institutions. This paper further suggests that the increasing complexity of international financial markets and the need to reduce systemic risk require a global supervisor to coordinate the regulatory activities of national authorities. Indeed, a global supervisor should take the lead in providing information and expertise for national authorities and should, in some cases, take more proactive measures to ensure compliance with international norms.