and responsibility; (ii) separation of the functions that
involve committing the bank, paying away its funds, and
accounting for its assets and liabilities.”
Where clear delegation of authority, segregation of
responsibilities are not in place, the most appropriate
and obvious action might be to initiate a more deter-
rence based approach—rather than a negotiative based
approach. However, reference must be made to factors
Iiiglilighted under the first paragraph of this conclusive
section.
Increased formalisation under principles based regu-
lation would still allow for a consideration of the
substance of transactions—whilst allowing for flexibility
in terms of its application. With regards to its applica-
tion, this implies its suitability as the appropriate mode
of regulation—based on rhe level of accountability it
could provide an organization with and whether an
organization, because of its structure and culture, should
consider applying it at all.
Notes
1. “Capital Requirements and Bank BehaviouriThe Impact of
the Basle Accord” Basle Committee on Banking Supervision
Working Papers No 1 April 1999 at page 1 <hffp.7∕uwu>.bis.
org/publ/bcbs_up 1 .pdfZnofranιes = 1>
2. ibid
3. ibid
4. ibid
5. Ibid at page 2
6. Ibid at page 3
7. ibid
8. ibid
9. Ibid at page 4
10. Ibid at pages 4 and 5
11. See ,Consultative Paper on a New CapitalAdequacy Framework''
June 1999 < http://uwiubis.org/press/p990603.htm>
12. See remarks of the chairman of the Task Force on the Future of
Capital regulation; ibid
13. “Basle bust” The Ecotiotnist April 13th 2000
14. M Saidenberg and T Schuermann, The New Basel Capital
Accord and Quesrions for Research (2003) Wharton Financial
Institutions CenterWorking Paper 2003 at page 4
15. ibid
16. ‘Capital Requirements and Bank Behaviour: The Impact of
the Basel Accord’ Basel Committee on Banking Supervision
Working PapersApril 1999 at page 21
17. ibid; Banks capital ratio may appear inflated “relative to the
riskiness of the remaining exposure”, see ibid
18. See ibid at pages 22-24
19. See A Saunders and L .-Mien, Credit Risk Measurement: Nem
Approaches to Value at Risk and Other Paradigms (2002) Second
Edition Wiley Publishers at page 24
20. So? ‘Basel II: Minimum Capital Requirements’ http.7∕muw.
bun des ba tιk .de∕ba rιketι antsicht Zbankenaufsicht_basel_s aeulel. etι .php
21. ibid
22. ibid
23. See Basel Committee on Banking Supervision, ‘Strengthening
the ResiHence of the Banking Sector’ Consultative Document,
Bank for International Settlements Publications December 2009
at page 1
24. See first key element of the proposals being issued by the Basel
Committee.
25. See Consultative Document of the Basel Committee for
Banking Supervision, “Strengthening the Resilience of the
Banking Sector” December 2009 at page 13
26. See M Ojo, ‘Extending the Scope of Prudential Supemsion:
Regulatory Developments During and Beyond the ‘Effective’
Periods of the Post BCCI and the Capital Requirements
Directives' , Journal of Advanced Research in Law and
Economics July 2010.
27. See Deutsche Bundesbank , ,,Securities Market Regulation:
International Approaches" Deutsche Bundesbank Monthly
ReportJanuary 2006 at page 41
28. Reguhtion, it is farther argued, „may also impact on the rela-
tionship between banks and the securities market as a source
of finance. So long as the banks are required to set aside eight
percent capital for loans to the financially soundest companies,
direct borrowing in securities markets will probably be a cheaper
form of funding for these companies". See „Basel Committee s
Proposal for a New Capital Adequacy FrameworkiArt/?;//
iuniiunorges-bank.no/templates/article,_____15120.aspx For further
information on this see M Ojo, „The Impact of Capital and
Disclosure Requirements on PJsks and PJskTaking Incentives**
(2010)
29. For further information on this, see M Ojo, ‘ Basel II and the
Capital Requirements Directive: Responding to the 2008/09
Financial Crisis’ (2009) http://ssm.com/abstract=I475189
30. “Credit Default Swaps and Counter Party Risk” European
Central Bank 2009 at page 62
31. ibid at page 36
32. Private sector financial institutions
33. For further objectives, seιr , Accompanying Document to the
Proposal for a Directive of the European Parliament and of
the Council amending Capital Requirements Directive on
trading book, securitisation issues and remuneration policies.
<http: / ∕ec. europa. eu Zinternalynarket /bank /docs ZregcapitalZ
cotn20Q9/imp(Kt_assesmcnt_cn.pdf> at page 22 of 47
34. See ibid at page 2 3 of 47
42 ∙ Bonking & Financial Services Policy Report
Volume 30 ∙ Number 9 ∙ SeptemberlOII