Abstract
The 2008 financial crisis started on Wall Street, but rapidly spread to the entire world. The response of the G20, international regulators and central bankers was the design and issuance of a new set of regulatory capital, liquidity and corporate governance standards—known as Basel III. As much as Basel III has gained the support of depositors and politicians, it has triggered a wave of stern opposition from bankers. In his widely distributed book—Basel III, the Devil and Global Banking—Dimitris Chorafas includes a detailed analysis of the concerns and anticipations of bankers, domestic supervisory agents and global regulators. This book review gives an appraisal of the book. Other than stressing the need for a total cultural transformation, embracing the ethos of risk management, Chorafas introduces a comprehensive restructuring program including efficient fiscal and monetary policies, enhanced governance procedures, improved risk management practices and the total separation between monetary authorities and politicians.
Notes
Basel III is the third version of Basel Accord I and Basel Accord II rules developed by the Basel Committee on Banking Supervision. While the predecessors of Basel III were primarily concerned with setting standards for capital adequacy, Basel III expands its standards to cover capital, liquidity and corporate governance requirements.
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References
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Taylor, M. (2010). ‘Basel III is bad news for emerging economies’, Financial Times, October 15, p. 11.
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Abdel-Baki, M., Shoukry, M. Basel III, the Devil and Global Banking. Eur J Law Econ 36, 227–230 (2013). https://doi.org/10.1007/s10657-013-9401-4
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DOI: https://doi.org/10.1007/s10657-013-9401-4