The Basel III Framework introduces a countercyclical capital buffer to reduce the procyclical-ity of the minimum capital requirements. The reference point for the decision to impose the buffer is based on the credit-to-GDP ratio. However, this guidance will exacerbate the prob-lem of...

Most explanations of the crisis of 2007-2009 emphasize the role of the preceding boom in real estate and asset markets in a variety of advanced countries. As a result, an idea that is gaining support among various groups is how to make Basel II or any regulatory regime less procyclical.This...

Multi-agency financial stability committees (FSCs) have grown dramatically since the global financial crisis. However, most cannot direct actions or recommend to other agencies that they take actions, and most would influence policy actions only through convening and discussing risks. We...