Supervision of financial institutions: The transition from Basel I to Basel III. A critical appraisal of the newly established regulatory framework
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 9 November 2015
Abstract
Purpose
This paper aims to highlight the new regulatory framework established by Basel III.
Design/methodology/approach
This paper provides a critical review of the existing literature concerning bank supervision while providing an overview of the transition from Basel I to Basel III rules and critical appraisal of the current regulatory framework. Review of the existing literature.
Findings
Basel III introduces new measures in favor of bank stability and in order to mitigate the propagation of financial shocks. But on the other hand the new regulatory framework adds an extra burden to banks’ business plans affecting credit policies and thus the real economy. Another issue that is not properly addressed is the rising of financial innovations that are able to pass by the new regulations. Overall Basel III rules are moving to the right direction but need to stay always up-to-date in order to catch up with the modern ever-evolving financial system. Pros and cons. Need for improvement.
Originality/value
The paper presents an up-to-date review of Basel rules with future prospects.
Keywords
Citation
Vousinas, G.L. (2015), "Supervision of financial institutions: The transition from Basel I to Basel III. A critical appraisal of the newly established regulatory framework", Journal of Financial Regulation and Compliance, Vol. 23 No. 4, pp. 383-402. https://doi.org/10.1108/JFRC-02-2015-0011
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited