DOCSLIB.ORG

Why Do Countries Implement Basel II? an Analysis of the Global Diffusion of Basel II Implementation

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Why Do Countries Implement Basel II? an Analysis of the Global Diffusion of Basel II Implementation The London School of Economics and Political Science Why do countries implement Basel II? An analysis of the global diffusion of Basel II implementation Young Bong Cho January 2013 A thesis submitted to the Department of International Relations of the London School of Economics and Political Science for the degree of Doctor of Philosophy, London, January 2013 Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work. The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent. I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of 98,585 words. Abstract Like its predecessor, Basel II has profoundly shaped bank capital adequacy regimes across the world. However, there has been little systematic research on the state of Basel II implementation across developed and developing countries, and the factors that promote or hinder the implementation of these voluntary standards are particularly under-researched. By drawing on a new global dataset of Basel II implementation across 150 countries compiled by the author, this thesis evaluates the state of Basel II implementation at the global level and investigates why countries implement Basel II. Three novel channels of policy diffusion formed across supervisory authorities, global banks and financial sectors were specifically constructed to study the diffusion of Basel II policies using a mixed-method research design. A quantitative study tests the effects of policy diffusion on Basel II implementation across four distinct channels of diffusion formed by inter- supervisory authority networks, the cross-border structure of international banks, competition between financial sectors and the nexus of international economic exchange. This is complemented by in-depth case studies that unpack the causal process through which policy diffusion shaped the national implementation of Basel II in Chile, Hong Kong, Korea and Malaysia. I find that the state of Basel II implementation at the global level is highly uneven and clustered, and show that Basel II policy decisions in countries are highly interdependent on the policy decisions of other countries with which those countries are closely interconnected. Policy diffusion not only promotes the degree of convergence with Basel II, but also reinforces partial, gradual and delayed implementation. The diffusion of implementation policies can thus be a curse and a blessing for the future of Basel II and the broader global financial regulatory architecture due to its double-edged power to promote as well as hinder the degree of regulatory convergence with international financial standards. Acknowledgements I would like to express my deepest gratitude to my supervisor, Professor Andrew Walter. I owe a large part of this thesis to Professor Walter, as it was his pioneering work on international financial standards that opened my eyes to this topic in the first place and motivated me to pursue a PhD on the implementation of Basel II. Professor Walter has been a fantastic role model and I feel extremely lucky to have been his supervisee. I am grateful for his critical, insightful, constructive, detailed and timely comments on all aspects of this thesis from start to finish. I would like to thank my parents and brother in Korea for their unconditional support. I am particularly indebted to my sisters and their family for their endless support, especially Sora, Do and Joo. I am especially thankful to Suyoun for always being there for me. Having spent over eight years at the LSE, I have many people to thank, but in particular, I would like to express my sincere gratitude to the Department of International Relations, Department of Economics and my colleagues at the LSE, especially Rajeev Sibal, Daniel Capparelli, Natali Bulamacioglu, Silvia Pepino, Kevin Young and fellow inhabitants of Q1. I would also like to thank Steve Crosby and Richard Jordan at Standard Chartered Bank. I dedicate this thesis to my father, Dr Kay Shek Cho. Table of Contents List of Figures and Tables ......................................................................................... 1 List of Acronyms and Abbreviations........................................................................ 2 Chapter One Introduction 1.1 Why do countries implement Basel II? ...................................................... 3 1.2 Research question and central explanatory framework .......................... 7 1.3 Overall research design ............................................................................. 10 1.3.1 A global dataset of Basel II implementation ........................................ 11 1.3.2 Quantitative study: Testing the effects of policy diffusion on Basel II implementation across the world .......................................................... 12 1.3.3 Six country case studies: Unpacking the process of policy diffusion ... 16 1.4 Chapter plans and summary of main arguments ................................... 20 Chapter Two Literature Review 2.1 Introduction ................................................................................................ 27 2.2 The Basel Committee, Basel I and Basel II ............................................. 28 2.2.1 The Basel Committee ............................................................................ 28 2.2.2 Basel I ................................................................................................... 31 2.2.3 Basel II .................................................................................................. 32 2.3 The empirical literature on the Basel Accords ........................................ 37 2.3.1 The empirical literature on Basel I ....................................................... 38 2.3.2 The empirical literature on Basel II ...................................................... 47 2.4 The theoretical literature: Explaining compliance with international norms ........................................................................................................... 49 2.4.1 The state-based enforcement approach ................................................. 49 2.4.2 The market-based approach .................................................................. 50 2.4.3 The managerial approach ...................................................................... 51 2.4.4 Functional institutionalism ................................................................... 53 2.4.5 Role of ideas ......................................................................................... 54 2.4.6 Domestic-level explanations ................................................................. 55 2.5 The policy diffusion literature .................................................................. 58 2.5.1 Policy diffusion: definitions and features ............................................. 58 2.5.2 Four policy diffusion mechanisms: How do policies diffuse? ............. 59 2.5.3 Strengths and weaknesses of the policy diffusion literature ................. 66 2.6 Conclusion .................................................................................................. 71 Chapter Three Basel II implementation at the global level: A quantitative analysis of Basel II implementation and its diffusion across 150 countries 3.1 Introduction ................................................................................................ 73 3.2 A global overview of Basel II implementation ........................................ 74 3.2.1 Measuring Basel II implementation across 150 countries .................... 74 3.2.2 The state of Basel II implementation across the world ......................... 79 3.3 Testing the effects of policy diffusion on Basel II implementation ........ 86 3.3.1 The Model ............................................................................................. 86 3.3.2 The dependent variable ......................................................................... 88 3.3.3 Policy diffusion variables ..................................................................... 89 3.3.4 Control variables ................................................................................... 94 3.4 Findings ..................................................................................................... 102 3.4.1 The effects of policy diffusion ............................................................ 104 3.4.2 The effects of control variables .......................................................... 107 3.5 Limitations of the quantitative analysis ................................................. 110 3.6 Conclusion ................................................................................................ 113 Chapter Four Case study design and case selection 4.1 Introduction .............................................................................................. 115 4.2 Case study design and methods .............................................................. 116 4.2.1 The within-case method of process tracing ........................................ 117 4.2.2 The cross-case method of controlled comparison ............................... 120 4.2.3 Case selection procedure ...................................................................
Load more

Recommended publications
  • Stepwise Anti-In Ammatory and Anti-SARS-Cov-2 Effects Following
    Stepwise anti-inammatory and anti-SARS-CoV-2 effects following convalescent plasma therapy with full clinical recovery Aurelia Zimmerli Lausanne University Hospital and University of Lausanne, Switzerland Matteo Monti Lausanne University Hospital and University of Lausanne, Switzerland Craig Fenwick Lausanne University Hospital and University of Lausanne, Switzerland Isabella Eckerle Geneva University Hospitals, Geneva Catherine Beigelman-Aubry Lausanne University Hospital and University of Lausanne, Switzerland Celine Pellaton Lausanne University Hospital and University of Lausanne, Switzerland Katia Jaton Lausanne University Hospital and University of Lausanne, Switzerland Dominique Dumas Lausanne University Hospital and University of Lausanne, Switzerland Gian-Marco Stamm Lausanne University Hospital and University of Lausanne, Switzerland Laura Infanti Regional Blood Transfusion Service, Basel, Switzerland Heidrun Andreu-Ullrich Interregional Blood Transfusion SRC, Epalinges, Switzerland Daphne Germann Lausanne University Hospital and University of Lausanne, Switzerland Marie Mean Lausanne University Hospital and University of Lausanne, Switzerland Peter Vollenweider Lausanne University Hospital and University of Lausanne, Switzerland Raphael Stadelmann Lausanne University Hospital and University of Lausanne, Switzerland Maura Prella Page 1/13 Lausanne University Hospital and University of Lausanne, Switzerland Denis Comte Lausanne University Hospital and University of Lausanne, Switzerland Benoit Guery Lausanne University Hospital
    [Show full text]
  • The Impact of Basel III on Korean Financial Services
    Financial Services The Impact of Basel III on Korean Financial Services Disclaimer This report was produced by Oliver Wyman on behalf of the Financial Supervisory Service. The figures presented in this report are based on outside- in analysis, using public data sources and internal Oliver Wyman reference data. The report aims to be neutral about the need for and merits of the new Basel III regulation, and to be purely factual about its strategic implications on the Korean banking landscape. The implications are hypotheses on behalf of Oliver Wyman and do not necessarily reflect the FSS’s own judgments; neither do they promise nor preclude any FSS action. Copyright © 2011 Oliver Wyman Contents 1. Executive summary................................................................................................ 1 2. Introduction .......................................................................................................... 10 3. Background to regulatory changes .................................................................... 11 3.1. The global financial crisis: causes and impact................................... 11 3.1.1. The subprime crisis .................................................................. 11 3.1.2. The global financial crisis ........................................................ 16 3.2. Lessons from the crisis .......................................................................... 18 3.3. Revision of Basel II.................................................................................. 20 4. Basel
    [Show full text]
  • ZOE LEONARD Biography Born 1961 in Liberty, New York Lives and Works in New York Solo Exhibitions 2022 Al Rio, Mudam Luxembourg
    ZOE LEONARD Biography Born 1961 in Liberty, New York Lives and works in New York Solo Exhibitions 2022 Al Rio, Mudam Luxembourg – Musée d'Art Moderne Grand-Duc Jean, Luxembourg 2018 Aerials, Hauser & Wirth, London Analogue, Hauser & Wirth, Los Angeles Zoe Leonard: Survey, Whitney Museum of American Art, New York; The Museum of Contemporary Art, Los Angeles Zoe Leonard, Kayode Ojo, Paula Cooper Gallery, New York 2017 Misia, Postwar, Galerie Gisela Capitain, Cologne 2016 I want a president, High Line Art, New York In the Wake, Hauser & Wirth, New York 2015 Anthony Meier Fine Arts, San Francisco Analogue, Museum of Modern Art, New York 2013 100 North Nevill Street, The Ice Plant, Chinati Foundation, Marfa Sun Photographs, Galerie Micheline Szwajcer, Antwerp 2012 Murray Guy, New York Sun Photographs, Galleria Raffaella Cortese, Milan Observation Point, Camden Arts Centre, London 2011 Available Light, Galerie Gisela Capitain, Cologne 2009 Photographs, Museum Moderner Kunst Stiftung Ludwig, Vienna Photographs, Pinakothek der Moderne, Munich 2008 You See I am here after all, Dia: Beacon, New York Derrotero, Dia at the Hispanic Society of America, New York Photographs, Museo Nacional Centro de Arte Reina Sofía, Madrid Galería Pepe Cobo, Madrid 2007 Photographs, Fotomuseum Winterthur, Winterthur Analogue, Villa Arson, Nice Analogue, Wexner Center for the Arts, Columbus 2006 Galerie Gisela Capitain, Cologne 2003 New Work, Paula Cooper Gallery, New York Galerie Giti Nourbakhsch, Berlin 2002 The Agency for Contemporary Art, London 2001 Anthony Meier
    [Show full text]
  • Johannes Wernz Strategy, Capital and Risk Management
    Management for Professionals Johannes Wernz Bank Management and Control Strategy, Capital and Risk Management Management for Professionals For further volumes: http://www.springer.com/series/10101 ThiS is a FM Blank Page Johannes Wernz Bank Management and Control Strategy, Capital and Risk Management Johannes Wernz Zurich Switzerland ISSN 2192-8096 ISSN 2192-810X (electronic) ISBN 978-3-642-40373-6 ISBN 978-3-642-40374-3 (eBook) DOI 10.1007/978-3-642-40374-3 Springer Heidelberg New York Dordrecht London Library of Congress Control Number: 2013949516 # Springer-Verlag Berlin Heidelberg 2014 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc.
    [Show full text]
  • After Burckhardt and Wölfflin; Was There a Basel School of Art History?
    After Burckhardt and Wölfflin; was there a Basel School of Art History? Christine B. Verzar Figure 1 Basel from the Rhine (author) For Linda Seidel in admiration and friendship When I first came to Boston University in 1966, at 26 years of age, fresh from Basel University with a Dr. phil. in Medieval Art History, Classical Archaeology, and Church History, and a dissertation on Italian Romanesque sculpture,1 one of the first An earlier shorter version of this topic was presented as a paper at the symposium in honor of Linda Seidel, Challenging the Myths of Art History, New York on February 13th, 2011. • I am especially indebted to the Director Emeritus of the Bibliothek des Kunstmuseums Basel, Nikolaus Meier for his generosity in providing insights and long discussions regarding this topic, and the staff of the Rare Book Collection at the Universitätsbibliothek Basel, as well as Dr. Ulrich Barth, Director Emeritus of the Basler Staatsarchiv for their help with primary and secondary sources. This article could not have been written without much advice in discussions with many colleagues and friends. I’d like to acknowledge especially my former contemporaries, the alumni students of the Kunsthistorisches Seminar der Universität, Journal of Art Historiography Number 11 December 2014 Christine B. Verzar After Burckhardt and Wölfflin; was there a Basel School of Art History? co-medievalists I met was Linda Seidel, then a young faculty member at Harvard. As luck would have it we saw each other each week when during my first year that coincided with Meyer Schapiro’s Norton Lectures on Romanesque Sculpture.2 I was struck by his brilliant lectures and insights and surprised that I had hardly heard of him.
    [Show full text]
  • The Formation of Financial Centers: a Study
    LIBRARY OF THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY Digitized by the Internet Archive in 2011 with funding from Boston Library Consortium Member Libraries http://www.archive.org/details/formationoffinanOOkind MASS. INST. S^ft 12 1973 QEWEY LIBRARY orking paper department of economics THE FORMATION OF FINANCIAL CENTERS: A STUDY IN COMPARATIVE ECONOMIC HISTORY C. P. Kindleberger Number 114 August 1973 massachusetts institute of technology 50 memorial drive Cambridge, mass. 02139 THE FORMATION OF FINANCIAL CENTERS: A STUDY IN COMPARATIVE ECONOMIC HISTORY C. P. Kindleberger Number 114 August 1973 Draft. Comments, corrections, criticism welcome. 1. I. Introduction It is a curious fact that the formation of financial centers is not studied today in economics. Partly it falls between two stools. Urban and regional economics which concern themselves with cities discuss the location of commerce, industry and housing but rarely that of finance. (An exception should perhaps be made for Canada [Kerr, 1965, 1967] and for i France [Labasse].) A recent United States survey of urban economics men- tioned finance only once in the text, and referred to no book on the subject in a bibliography of 438 items [Goldstein and Moses]. At the same time, a vigorous new literature on money and capital markets and their role in eco- nomic development takes no interest in geographical location or the relation- ships among financial centers [Goldsmith, McKinnon, Sametz, Shaw]. Apart from a sentence or two, one would think that the money and capital market was spread evenly throughout a given country. Such general analytical literature as I have found goes back to World War I.
    [Show full text]
  • R-City Guide
    Published on «Die Reformation geht weiter… » (https://www.ref-500.ch) Home > R-City Guide R-City Guide The Federation of Swiss Protestant Churches launches “R-City Guide,” a free app featuring interactive tours in ten key locations of the Swiss Reformation. The app is now available for free at the App Store and Google Play. GPS-guided tours show your own location and guide you along key points of interest that are explained with texts, images and audio. Users can discover Zwingli’s birthplace in Wildhaus in the district of Obertoggenburg, explore the backgrounds of the “disputation window” inside Lausanne Cathedral, visit the “Churer Hasenstube” in the St. Martin parsonage and view Europe’s largest church clock in Zurich. A national calendar of events complements the R-City Guide; in addition, links to the participating Reformed Cantonal churches and the Cantonal tourism websites are provided. The first version, published today, includes Basel, Bern, Chur, Geneva, Ilanz, Lausanne, Neuenburg, St.Gallen, Wildhaus and Zurich. Schaffhausen will be added in the coming year. [1] [2] [3] Basel [3] [4] Bern [4] [5] Chur [5] [6] Geneva [6] [7] Ilanz [7] [8] Lausanne [8] [9] Neuchâtel [9] [10] Schaffhausen [10] [11] St. Gallen [11] [12] Wildhaus [12] [13] Zurich [13] Basel Places Town Hall The Town Hall was and is Basel’s political center. The town hall clock is located on the main façade, adorned with a standard-bearer, a Lady Justice and the city patrons, Emperor Heinrich II. and Empress Kunigunde. The Lady Justice figure is a reference to the court of law situated within the Town Hall.
    [Show full text]
  • 150 Years of Banking Tradition
    150 years of banking tradition Contents 4 Introduction 6 History timeline 8 1862–1912 16 1912–1945 22 1945 –1980 30 1980–2000 34 Into the 21st century 37 Outlook 3 Introduction In 2012, UBS celebrates its 150th anniversary. This important milestone in our long history serves to demonstrate our firm’s established place in the evolution of the modern global banking sector and our pivotal position as part of the Swiss banking tradition. Banking in Switzerland has a very long land. Then the Basler Bankverein was nents, of which the oldest, London, tradition stretching back to medieval founded in 1872 and as a result of was opened precisely one hundred years times. This heritage may explain the various mergers eventually became the before the merger. More recently, UBS’s widespread impression both at home Swiss Bank Corporation. global roots were substantially strength- and internationally that Switzerland has ened by various acquisitions. Some of always been a strong financial center. One of the main objectives of the merg- the firms acquired by the Union Bank of It is a perception that has repeatedly er that created UBS in 1998 was to es- Switzerland, SBC and UBS in the 1980s, been reinforced in popular fiction as well tablish a truly global firm to give private, 1990s and 2000s also traced their as other media. In reality, the size and corporate, institutional and sovereign historical roots back to the 19th century, international reach of Swiss banking clients worldwide access to services and most notably the US brokerage firm were largely a product of the second markets, to advice and to the highest- Paine Webber, the foundation upon half of the 20th century and were signif- quality execution of orders and man- which today’s UBS Wealth Management icantly influenced by the Union Bank dates.
    [Show full text]
  • Burden and Timeline of Infectious Diseases in the First Year After Solid Organ Transplantation in the Swiss Transplant Cohort Study
    Zurich Open Repository and Archive University of Zurich Main Library Strickhofstrasse 39 CH-8057 Zurich www.zora.uzh.ch Year: 2020 Burden and Timeline of Infectious Diseases in the First Year After Solid Organ Transplantation in the Swiss Transplant Cohort Study Swiss Transplant Cohort Study ; van Delden, Christian ; Stampf, Susanne ; Hirsch, Hans H ; Manuel, Oriol ; Meylan, Pascal ; Cusini, Alexia ; Hirzel, Cédric ; Khanna, Nina ; Weisser, Maja ; Garzoni, Christian ; Boggian, Katja ; Berger, Christoph ; Nadal, David ; Koller, Michael ; Saccilotto, Ramon ; Mueller, Nicolas J Abstract: BACKGROUND The burden and timeline of posttransplant infections are not comprehensively documented in the current era of immunosuppression and prophylaxis. METHODS In this prospective study nested within the Swiss Transplant Cohort Study (STCS), all clinically relevant infections were identified by transplant-infectious diseases physicians in persons receiving solid organ transplant (SOT) between May 2008 and December 2014 with ฀12 months of follow-up. RESULTS Among 3541 SOT recipi- ents, 2761 (1612 kidney, 577 liver, 286 lung, 213 heart, and 73 kidney-pancreas) had ฀12 months of follow- up; 1520 patients (55%) suffered 3520 infections during the first year posttransplantation. Burden and timelines of clinically relevant infections differed between transplantations. Bacteria were responsible for 2202 infections (63%) prevailing throughout the year, with a predominance of Enterobacteriaceae (54%) as urinary pathogens in heart, lung, and kidney transplant recipients, and as digestive tract pathogens in liver transplant recipients. Enterococcus spp (20%) occurred as urinary tract pathogens in kidney transplant recipients and as digestive tract pathogens in liver transplant recipients, and Pseudomonas aeruginosa (9%) in lung transplant recipients. Among 1039 viral infections, herpesviruses predominated (51%) in kidney, liver, and heart transplant recipients.
    [Show full text]
  • History of the Church of Jesus Christ of Latter-Day Saints in Switzerland
    Brigham Young University BYU ScholarsArchive Theses and Dissertations 1971 History of The Church of Jesus Christ of Latter-Day Saints in Switzerland Dale Z. Kirby Brigham Young University - Provo Follow this and additional works at: https://scholarsarchive.byu.edu/etd Part of the European History Commons, Missions and World Christianity Commons, and the Mormon Studies Commons BYU ScholarsArchive Citation Kirby, Dale Z., "History of The Church of Jesus Christ of Latter-Day Saints in Switzerland" (1971). Theses and Dissertations. 4850. https://scholarsarchive.byu.edu/etd/4850 This Thesis is brought to you for free and open access by BYU ScholarsArchive. It has been accepted for inclusion in Theses and Dissertations by an authorized administrator of BYU ScholarsArchive. For more information, please contact [email protected], [email protected]. HISTORY OF THE CHURCH OF JESUS CHRIST OF IATTERLATTER DAY SAINTS IN werlandswitzerlandMERLANDSWI A thesis presented to the department of church history and doctrine brigham young university in partial fulfillment of the requirements for the degree master of arts by dale Zzo kirby may 9 1971 acknowledgmentacknowledgments S with sincere appreciation for their valuable help in making this project possible the writer expresses gratitude to the following drdro richard 000oo cowan chairman of the advisory committee for his many valuable suggestions and sincere interest as he directed the writing of this research projectprojectsprojecto dr hyrum Llo10 andrus member of the advisory committee for
    [Show full text]