A Paradigm Shift in Global Banking Regulation and Supervision

The Basel Committee on Bank Supervision (BCBS) assumed the role as the international advisory authority on bank regulation; the BCBS has promulgated guidance on issues critical to ensuring health in the banking systems across the world. The Basel Accords have caused disagreement at times, but they are nevertheless important to the formulation of regulatory policy relating to bank capital. In all, the BCBS has produced three such accords. Basel III, published in 2010, is the most recent Accord. Each Accord has purported to improve upon the previous one, but early indications suggest that Basel III is not flawless and so it will likely not be the last Accord. (Larson; 2011) Folres et al (2006) in his paper analyses the capacity of response of the banking sector’s information systems (IS), in the light of the new requirements of Basel II (Basel Bank for International Settlements) on the measurement and control of operational risk (OR).