Banks: Testing post-GFC regulatory frameworks

IN THE aftermath of the global financial crisis (GFC) of 2008-2009 and its echo, the eurozone crisis of 2011-2012, the transformation of the global banking system was both rapid and dramatic.

At the foundation of the new regulatory framework that was to govern the sector in the post-crisis era was the increased resilience of banks. Expanded general capital levels were imposed, forming the core of the new regulations.

However, the oversight regime also sought to tailor capital requirements for institution-specific risks, including those deemed systemically important, creating a more granular regulatory regime within the sector.