Publication

One of the most significant casualties of the recent financial crisis has been the Basel II Accord, a set of proposals to regulate the international banking system drawn up by a committee of G10 banking supervisors between 1999 and 2004. Whether or not they view Basel II as a direct contributor to the crisis, policymakers agree that the fundamental tenets of the accord have been decisively discredited by recent events. In this paper, I ask why Basel II’s creators fell so short of their aim of improving the safety of the international banking system – that is, why Basel II failed.