The four pillars of ‘Basel IV’

‘Basel IV’ and the stability of the financial industry

  • The latest batch of rules in the Basel process will introduce crucial changes
  • Many in the banking industry say the rules are too restrictive
  • Quantitative analysis shows they actually don’t go far enough
  • More changes are in store, leaving the industry in uncertainty

The global financial crisis of 2007-2008 showed how undue risk-taking, and even fraudulent practices, had become commonplace in the banking industry worldwide. Supervisors and regulators watched helplessly as a sudden cascade of major bank failures plunged the leading economies into a severe (and, to some extent, still ongoing) recession. For the next decade, overcoming the weaknesses of existing national and international regulatory frameworks became a top priority.

When the crisis hit, several regulatory safeguards were already in place in the banking industry that were supposed to prevent a systemic collapse. Among them was the set of recommendations on banking regulations put forth by the Basel Committee on Bank Supervision (BCBS).

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Professor Elisabeth Krecké
Many bankers see the new risk-weight calculation rules as the straw that could break the camel’s back
read more about it in the report
What's inside
  • The latest batch of rules in the Basel process will introduce crucial changes
  • Many in the banking industry say the rules are too restrictive
  • Quantitative analysis shows they actually don’t go far enough
  • More changes are in store, leaving the industry in uncertainty
Who will benefit?
  • Report is targeted to the decision makers in cross country manufacturing – suppliers, manufacturers, logistics.
  • Also considered useful for the administrative university facilities, to better understand the possibe effects of current decisions.
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