Elizabeth Fournier
Staff writer
No one will ever know whether Basel II could have mitigated the financial crisis, had it been implemented earlier. Respondents to the Bankers' Counsel Poll still seem to have confidence in it, supporting the Basel Committee's move to include stricter penalties for risky exposures. But private practice lawyers disagree.
James Tanenbaum, chair of the global capital markets practice at Morrison & Foerster, has lost confidence in any regulation that relies on modelling. Instead he says that tangible common equity (TCE) should be relied on as a test of banks' and companies' financial strength. He also thinks a global regulator is impossible and undesirable.
IFLR: Why does no one want a global regulator?
James Tanenbaum: It's always difficult to develop much enthusiasm for anything that involves ceding a portion of a nation's sovereignty. That's what inevitably happens when you have a global regulatory authority. It's not feasible anyway, but even...