Catalog

	Table of Contents
p. 32 of 58 BACK | NEXT Purpose and Structure of the Toolkit Part One: Introduction and Overview Part Two: Preconditions and Infrastructure for Financial Sector Development Part Three: Financial Regulation and Supervision I. Financial Stability, Development and Institutional Design II. Financial Regulation: General Principles III. Financial Regulatory Structure IV. Banking Regulation A. International Standards B. Guidance and Recommendations V. Bank Insolvency and Depositor Protection VI. Securities and Derivatives Regulation VII. Insurance and Pensions Regulation VIII. Regulation of Financial Conglomerates Part Four: Regional Financial Integration Part Five: ADB's Intervention in the Financial Sector Bibliography Glossary and List of Abbreviations Acknowledgements

Financial Sector Legal and Regulatory Toolkit : Part Three: Financial Regulation and Supervision : IV. Banking Regulation

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B. Guidance and Recommendations

In addressing design and structure of banking regulation, it is useful to begin with the Basel Core Principles. The Basel Core Principles provide a useful summary and checklist of issues which must be considered in banking regulatory design and implementation through a country's domestic legal system. Since the principles are of a general nature reflecting their status as an internationally negotiated and agreed standard, the Basel Core Principles will in most cases only be the starting point in reviewing and addressing issues of banking regulation.

If a country has gone through an FSAP or a banking ROSC, then this should be reviewed closely as it will provide important guidance in addressing issues. However, if a country has not undergone an FSAP or banking ROSC, it may refer to the FSAP/ROSC for similar countries as these would provide useful guidance regarding the process for becoming integrated into the international financial system.

The Basel Core Principles Methodology also provides a detailed and specific checklist of issues to address and consider in implementing the Basel Core Principles. Further, the Core Principles and Methodology are supported in most cases by individual standards and guidance from the Basel Committee on implementation and approach. In the banking area, these form quite a comprehensive and detailed resource set.

Once key issues and design factors have been addressed through the preceding analysis, it is useful to look at possible models. While there are no internationally agreed model laws, treaties, and other instruments, the EU regional financial arrangements provide a useful starting point. A variety of EU directives directly addresses matters of banking regulation, and may be directed towards a variety of different legal, economic, and development environments.

Going forward, it will be important to consider not only new capital standards being developed but also new liquidity and leverage standards.

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