Strengthening the Resilience of the Banking Sector: Proposals to Strengthen Global Capital and Liquidity Regulations
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As well as addressing the Basel Committee's proposals to strengthen global capital and
liquidity regulations, this paper also considers several reasons why information disclosure
should be encouraged. These include the fact that imperfect information is considered to be a
cause of market failure which “reduces the maximisation potential of regulatory
competition”, and also because disclosure requirements would contribute to the reduction of
risks which could be generated when granting reduced capital level rewards to banks who
may have poor management systems. Furthermore it draws attention to the need for greater
measures aimed at consolidating regulation within (and also extending regulation to) the
securities markets – given the fact that „the globalisation of financial markets has made it
possible for investors and capital seeking companies to switch to lightly regulated or
completely unregulated markets
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HG Finance