Regulation and Supervision of the Biggest Banks by the Biggest Countries: Consensus on Principles, Variation in Practices

Jan 22, 2014
Publisher: Milken Institute

All around the world, financial system policymakers continue to respond vigorously to the problems in financial markets, institutions, and regulation and supervision brought into relief by the crisis of 2007 through 2009. However, the overall understanding of those responses remains rather vague and, perhaps, inaccurate. This is true even in regard to a central focus of policymakers, the financial press, and market participants: measures to address the risks posed by large, globally active banks.

The purpose of this article is to add clarity and depth to the understanding of this issue. At first blush, this article's title itself may seem imprecise by referring to the "biggest countries" and the "biggest banks." What exactly do we mean by these terms? This article is structured to define both categories precisely, highlighting key information about regulatory and supervisory policies and practices that is either new or little-known.