Banking Law
Answer one of the following question/s:
1. “In response to the COVID shock, many countries have relaxed macro prudential policy tools to enable banks to absorb expected losses and support the continued provision of credit to the real economy.”Discuss the challenges in implementing macro prudential tools to prevent or mitigate risks to financial stability.
2. “Basel III is a clear improvement over its predecessors, as it requires banks to hold more, higher quality capital and introduces macro prudential standards that address systemic risks in the financial sector. Yet many argue that the changes fall far short of what is needed.” E Jones, The Political Economy of Bank Regulation in Developing Countries: Risk and Reputation (2020). Discuss.