An additional manifestation was that regulators were to shift part of the duty for observing markets into the control of private investors by requesting public and private actors to disclose much information concerning their regular activities. This market discipline was elevated by Basel II agreements capital supervisions and requirements. The conformity also allowed large banks to utilize their risk management strategies and information to determine the quantity of reserve capital to be saved for credit risk. It also assigned credit rating organizations an official duty in credit risk assessment for all kinds of banks. Generally, a paradigm shift in terms of prudential policies resulted in States increasing attempts to work with, instead of against market forces.Apart from expanding international financial regulation perimeter, State leaders tried to reinforce their institutional basis by establishing joint supervisory colleges for all key cross-border monetary institutions. The Financial Stability Board (FSB) was assigned the task of collaborating with IMF in carrying out early warning practices as well as supporting and setting guidelines to the supervisory colleges. FSB was also required to undertake cooperative strategic evaluations of the policy development task of the global standard setting bodies to make sure that their work is coordinated, timely, addressing gaps, and focused on priorities. The bodies required to set bodies were to report their work to FSB in order to provide a wider accountability framework regarding their. Theoretical Foundation of States Regulatory Response to the Financial Crisis.
Work CitedGoodhart, Charles. The Regulatory Response to Financial Crisis. New York: Edward Elgar Publishing, 2010. Print.
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