| Summary/Abstract |
After the 2008 global financial crisis, the newly revised Basel III international regulatory framework for banks enhanced the macroprudential objective of addressing the systemic risk inherent in financial markets. This revision of the Basel framework was lauded as an example of a paradigm change from an efficient market consensus to a macroprudential consensus in global banking regulation. However, this so-called Basel consensus merely tweaked the market-friendly nature of the Basel II framework rather than fundamentally overturning it due to the inadequacy of macroprudential ideas as an alternative paradigm. This inadequacy could be largely attributed to the manner in which global financial reforms were discussed and formulated. The club-based model of financial regulation governance enabled financial technocrats, informed by the precrisis paradigm, to maintain their privileged positions in the postcrisis reform process. Consequently, postcrisis reform proposals were built upon the existing paradigm, making the 2008 financial crisis a conservative rather than transformative event.
|