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SUMMARY:Summer in the City: banking failures of 1974 and the development o
 f international banking supervision - Professor Catherine Schenk (Glasgow)
DTSTART:20141017T160000Z
DTEND:20141017T173000Z
UID:TALK55071@talks.cam.ac.uk
CONTACT:31344
DESCRIPTION:This paper examines how the ‘near miss’ global banking cri
 sis in the summer of 1974 affected longer-term trends in international ban
 king supervision\, with a particular emphasis on the impact on trust withi
 n banking systems and between supervisors and the market. Three episodes o
 f bank fraud in 1974 were crucial in prompting the launch of the Basel Com
 mittee for International Banking Regulation. The effects that each of thes
 e episodes had on national and international policy are\nexplored\, using 
 new archival evidence. This evidence shows how the events of 1974 prompted
  the individual and collective reassessment of regulation systems that had
  been developed in the more stable environment of capital controls and peg
 ged exchange rates of the first three decades after the end of the Second 
 World War. But the challenges of how to replace trust with formalised stru
 ctures proved intractable. Despite clear evidence of widespread fraud\, su
 pervisors generally persisted with the notion of self-regulation\, althoug
 h they took steps toward formalising their\nassumptions through the Basel 
 Accord\, increased monitoring and letters to formalise hitherto implicit c
 ommitments to good practice. After more than 30 years of grappling with th
 ese issues\, the 2007 global financial crisis revealed that the problems o
 f transparency and effective supervision are persistent challenges for the
  global banking system.\n
LOCATION:Graham Storey Room\, Trinity Hall
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