Global Financial Standards and Regulatory Reforms

The present paper discusses global financial standards and their relevance as part of the regulatory reforms initiated in the aftermath of the financial turmoil. In a first – precursory – part, it provides more clarity on the notion and role of “soft” law instruments, which have become an eminent pillar for the regulation of global finance. The essay likewise highlights the financial sector specific division of labor between the different international bodies, fora, and organizations in charge of global agenda-/standard setting. In the main – analytical – part, the article will turn to the sweeping reforms triggered by the experiences in the financial crisis. Emphasis is put on standards aimed at preventing systemic risk in the field of capital adequacy, prudential supervision, and accounting. The analysis of the reform efforts reveals specific deficiencies, which raise doubts as to their effectiveness to deal with a crisis comparable to the one in 2008 et seqq. In the final –…