Since its inception, the Basel III international regulatory framework for banks has manifested a number of weaknesses in tackling the idiosyncratic and systemic risks arising from highly leveraged credit institutions. The continuing reliance on internal rating models to calculate capital...

The European experience suggests that the efforts made to achieve an efficient trade-off between monetary policy and prudential supervision ultimately failed. The severity of the global crisis have pushed central banks to explore innovative tools-within or beyond their statutory...