Are Global Capital Rules Possible?
Recent developments have served as a reminder that the institutional arrangements governing the setting of capital standards for banks in the United States, the United Kingdom, and the European Union are remarkably different. In its effort to establish a common framework, the Basel Committee faces potentially insuperable odds.
LONDON – What’s in a name? The final proposals for bank-capital rules were dubbed Basel 3.1, as if to suggest a minor tidying-up exercise – just a few grace notes added to a melody composed long ago. But banks, concerned that the implications would be more severe, spoke of Basel 4, implying not grace notes, but a reworking of the entire composition, now in a major key.