Creating a Safer Financial System: Will the Volcker, Vickers, and Liikanen Structural Measures Help?

Author/Editor: Vinãls, José ; Pazarbasioglu, Ceyla ; Surti, Jay ; Narain, Aditya ; Erbenova, Michaela ; Chow, Julian
Publication Date: May 14, 2013
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Summary: The U.S., the U.K., and more recently, the E.U., have proposed policy measures directly targeting complexity and business structures of banks. Unlike other, price-based reforms (e.g., Basel 3 and G-SIFI surcharges), these proposals have been developed unilaterally with material differences in scope, design and implementation schedules. This may exacerbate cross-border regulatory arbitrage and put a further burden on consolidated supervision and cross-border resolution. This paper provides an analysis of the potential implications of implementing different structural policy measures. It proposes a pragmatic and coordinated approach to development of these policies to reduce risk of regulatory arbitrage and minimize unintended consequences. In doing so, it also aims to identify a set of common policy measures that countries could adopt to re-scope bank business models and corporate structures.
Series: Staff Discussion Notes No. 13/4
Subject(s): Banking sector | Bank resolution | Bank supervision | Bank reforms | Risk management | International financial system

Publication Date: May 14, 2013
ISBN/ISSN: 9781484340943/2221-030X Format: Paper
Stock No: SDNEA2013004 Pages: 27
US$10.00 (Academic Rate:
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