An Analysis of Basel III as a Prophylactic

The aim of this research is twofold. The first is to gauge the efficacy of Basel III which is the Basel Committee on Banking Supervision’s response to the global financial crisis that broke out in the summer of 2007, while the second is the examination of the role of law in crisis. The Basel Committee on Banking Supervision is the international agency tasked with standard setting for internationally active banks and within this remit is the charge to position these banks to withstand crisis and possibly forestall the outbreak or spread of crisis. One the other hand, the concept of law serves as an original, self-creating justification for regulating human conduct. Law has a number of unique features that may benefit international banking regulation. As the global community becomes ever smaller and systemic risk continues to plague the already heavily interconnected global financial system, these investigations are important to ensure the growth and development benefits of a stable global financial and economic system are enhanced.
To meet this aim, this research investigates the doctrine behind the way law is used to check crisis. Since the primary reason for the accord in the global financial crisis and crisis represents crash in a financial system, hence inefficiency, the research pairs law with economics to determine whether efficiency is to be had in the present state. The data relied upon is secondary data from the extensive literature that exists on each of the subject matters. In the end, the research findings are that Basel III is an improvement on Base II but may be plagued by implementation issues like its predecessors and that the is a likelihood of another financial crises and the BCBS is doomed to be reactionary rather that preventive. Also, lacking the coercive quality of law, international financial regulation is in a porous state and may benefit from conceptual and structural changes.