The Basel Committee on Banking Supervision: a post-crisis assessment of governance and accountability

Abstract

This paper focuses on the Basel Committee on Banking Supervision (BCBS), a transitional regulatory network that is widely perceived to be central to the system of global financial governance. The BCBS was established in 1974 as an informal group of central bankers and bank supervisors with the mandate to formulate supervisory standards and guidelines. Although the Committee does not have any formal supranational authority, it is the de facto global banking regulator and its recommendations have been widely implemented by member and non- member states.The paper investigates the BCBS governance and policies in the context of the recent global financial crisis to determine the extent to which it has been publicly accountable. This investigation will be guided by four normative questions: 1) How transparent is the BCBS? 2) How and by what means does the BCBS consult the public in its policymaking process? 3) How and by whomis the committee's performance monitored? 4) To what extent has the committee taken corrective measures to make the banking system more resilient against crises? The paper argues that the BCBS has gradually become a more accountable institution but that significant room stillexists for improvement. The paper will identify the most important gaps in BCBS accountability and spell out policy prescriptions for addressing them.