Reason Writers Around Town: Anthony Randazzo on Reforming International Banking
Writing at the finance site Minyanville.com, Reason Foundation Director of Economic Research Anthony Randazzo explains why the new international banking rules established in Basel, Switzerland are unlikely to prevent another financial crisis. As Randazzo writes:
While the overall new design for capital requirements is well-intended, and might be more prudent than previous iterations of international banking standards, the Basel III Accord misses the main lesson of the global financial crisis: Over reliance on regulatory structures decreases incentives for financial institutions to watch their own backs.