Current Problems of Banking Supervision and Regulation: A New Evidence

Abstract

At present, in the era of globalization, the banking sector failure in one country can cause negative externalities for the financial institutions of other states. The fundamental problem of implementing standards based on Basel II is that these standards contribute to the development of pro-cyclicality of banking regulation. The authors emphasize the need to design such a regulatory system, which should contribute to innovative development and at the same time restrain socially dubious novelties. Therefore, the article substantiates the need to increase the size of the capital "buffer", which is intended to address the problem of improving the financial situation and increasing the financial viability of the largest banks and banking systems. This reduces risks and increases the capital "safety cushion", as well as optimizes the impact on the commercial banks behavior caused by the use of counter-cyclical capital regulation requirements. The conducted research supported the hypothesis put forward by the authors that when forming a countercyclical capital buffer it is necessary to focus on indicators of: return on assets of the banking system (ROА) and return on equity (ROE), depending on GDP growth, but this dependence does not become evident immediately, but with a time lag of 1 year. The object of the research is the banking system of Russia.

Quality of Board Members’ Training and Bank Financial Performance: Evidence from Portugal

“…For example, (Kirkpatrick, 2009) implicated the various lapses in corporate governance as one of the reasons for the 2007 global financial crisis. As Kruglikova et al (2018) state, the financial crisis of 2007-2009 revealed the imperfection of the banking regulatory system. Adams and Mehran's (2012) study on corporate governance in banks emphasized the strong need for taking into account the particularities of banks when implementing corporate governance reforms.…”