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Article: Don't Blame the Whole Mess on Basel II.(Viewpoint essay)
- Article from:
- American Banker
- Article date:
- August 14, 2009
- Author:
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Byline: Karen Shaw Petrou
Analyses of the origins of the financial crisis all too often start from an unquestioned premise: Basel II is to blame for a lot of what befell the global financial system. This point is critical, as it is driving much at both the bank regulators and on Capitol Hill. It's wrong, though. Basel II is far from perfect, but it didn't come into effect in the E.U. until 2007 and it was only effective to a limited degree for a small number of big U.S. firms before the crash.
What's most wrong with Basel II is that Basel I lasted far too long.
Basel II was set in motion in the late 1990s because it was clear that financial ...