The new Basel accord and developing countries: problems and alternatives
CFAP Working Paper
CFAP, Cambridge Judge Business School, University of Cambridge
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Ward, J. (2002). The new Basel accord and developing countries: problems and alternatives.
The new Basel Accord framework relies on markets and supervisors to discipline banks. Yet both markets and supervisors fail, and more so in developing countries than in high-income countries. Therefore, the new Accord is not, as its designers claim, suitable for wide application. Nevertheless, developing country policymakers have little choice but to implement it in part or in whole. Hence there are problems of governance in international regulation. I offer seven general principles for the design of a prudential regime more robust to government and market failure. Four alternative capital regimes are evaluated in the light of these principles. Simpler and harsher regimes are likely to achieve greater safety with a given level of resources.
Basel Accord, Basel 2, international banking law, bank regulation, capital adequacy, finance and development, World Trade Organisation
This record's URL: http://www.dspace.cam.ac.uk/handle/1810/225212