Global Financial Standard Setting, the G10 Committees, and International Economic Law

Abstract

he global financial and credit crisis of 2007!2009 has highlighted the important role of the G10 committees in setting international standards for the regulation of bank capital adequacy, payment systems, and related issues pertaining to global financial stability. The main three G10 committees"consisting of the Basel Committee on Banking Supervision (#Basel Committee$ or #BCBS$), the Committee on Payment and Settlement Systems (#CPSS$), and the Committee on the Global Financial System"are the most influential international financial standardsetting bodies and exercise either direct or indirect influence over the development of banking and payment system law and regulation for all developed countries and most developing countries. Specifically, the Basel Committee has produced a number of important international agreements that regulate the amount of capital that banks must set aside against their risk-based assets, and the allocation of jurisdictional responsibility for bank regulators in overseeing the international operations of banks. Its activities have usually been kept away from the fanfare of high politics, but its recent efforts to amend the 1988 Basel Capital Accord by adopting the Basel II Capital Agreement (#Basel II$) and to extend its application to all countries where international banks operate have attracted significant critical comment and brought its work under close scrutiny by leading policymakers and regulators. The CPSS has created important agreements setting forth principles and recommendations for the regulation of bank payment systems and for the regulation of clearing and settlement of securities trading, and recommendations regarding counterparties. The Committee on Global Financial Systems, though it has not yet adopted regulatory principles or recommendations, has produced a number of influential reports that have influenced the debate on