Current theories of financial regulation suggest expanding rules-based formal state intervention to promote international banking stability. Such policy solutions should then be global in scope. This article instead argues that principles-based informal co- and self-regulation through domestic...

After the Latin American Debt Crisis of 1982, the official response worldwide turned to minimum capital standards to promote stable banking systems. Despite their existence, however, such standards have still not prevented periodic disruptions in the banking sectors of various countries. After...