Shujin Xie

An interesting background on bank regulation, the Basel Accord. The Basel Accord is an international standard used to determine the capital adequacy ratio of the banking industry and has been adopted by hundreds of countries and regions.  The Basel Accord was born due to the failure of two well-known international banks, Herstatt bank and Franklin National Bank. Their bankruptcy has made regulators aware of the importance of banking regulatory issues. After these two banks went bankrupt. In September 1975, the first Basel A ccord  was introduced. This accord  is relatively simple. The basic core content is to put forward two key requirements for international banking supervision. First, any bank's overseas institution cannot escape supervision. Second, the country where the subject is located and the country where the transnational is located should share responsibilities.  Basel I  clarifies the regulatory capital requirements for credit risk, and divides the c...

WHAT ? In the bank supervision we often refer to, it is not just the literal meaning of "the bank is controlled." On the one hand, from a smaller perspective, bank supervision means a country’s regulatory agency, which may be the government or other agencies that manage and supervise some business activities of bank financial institutions. On the other hand, from a larger perspective, bank supervision does not only refer to these, but also includes self-management and internal supervision of bank financial institutions.(Min Wu,2004) Of course, every country in the world has different banking supervision systems. However, in general, it can be divided into two modes of supervision. First, set up an institution to specifically supervise banks. At this time, the central bank does not have the function of supervision. The second is that the central bank and other financial institutions simultaneously exercise the power to supervise banks.(Shenghu Wang,2013) WHY ? So why should we...