Since mid-2007, an increasing number of people among economists, policy-makers and market operators have blamed the Basel II framework for banks' capital adequacy to be a major cause for the subprime financial crisis. While several issues related to the functioning of financial markets have been...

The far-reaching regulatory activity in which the financial sector has been involved in recent years has been attracting increased attention to the expected costs and benefits of such regulation; measures undertaken in response to the financial crisis have made these issues even more topical....