Search

The paper empirically examines the implementation record of international financial regulation of the banking sector. The study finds that the size of the banking sector and the presence of global systemically important banks (G-SIBs) are positively associated with a stronger implementation record. These results suggest that cooperative motives of internalising externalities, creating a level playing field and preserving financial stability play a role in explaining the implementation record. We find evidence that this cooperative behaviour may be driven by the self-interest of global players as the positive record is particularly strong in countries where large banking sectors and big banks are both present, and where regulation only applies to large players. Sectoral concentration, bank health and the share of foreign ownership yield more mixed results as regards their impact on implementation., Competing Interests: The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.Annex Table 1Overview of literature on the political economy of financial regulation and international organisationsAnnex Table 1Literature on the political economy of financial regulation and international organisationsDreher and Lang (2016)Political economy of international organisations: club theory, ensure time consistency of intl. deals, package deals across countries; role as scapegoats, Susceptibility to interest group capture.Vaubel (2004, 2006)Political economy of international organisations.Theory/conceptual frameworks and empiricsAmri and Kocher (2009)Higher supervisory quality reduces risk of banking crisisBemelech and Moskowitz (2010)Historical evidence on capture in 19th centuryCalomiris and Haber (2014)History of financial regulation, outcome of bargainingDagher (2018)Pro-cyclical regulatory cycles due to special interest lobbying and post crisis rule erosionHardy (2006)Model on regulatory capture in the banking sectorHolthausen and Ronde (2004)Theoretical political economy model of regulation and supervision of bank resolutionIgan D. and T. Lambert (2019)Lobbying and regulatory capture pre-crisis, evidence for USLaffont and Tirole (1991)Expansion of the regulatory capture theoryLall (2012)Basel II was captured, industry with first mover advantage, Basel III with G20 better, recapture as of 2010Monticelli (2019)Survey of literature, also international rule setting, G formatsStigler (1971)Early theory on regulatory captureWah Hlaing and Kainaka (2018)Financial crisis stokes policy reform but not necessarily strengthens financial regulationYoung (2012)Capture is overstated, partly no success of lobbies post crisisInternational rule settingArner and Taylor (2009)Soft law via expansion of FSB mandate strengthened supervision9Farrell and Neumann (2015)Global firms supported international rule-makingHowarth and Quaglia (2013)Basel III and CRD IV features influenced by national financial sector of France, UK and GermanyMonticelli (2019)Intl. firms plus natl. specificities for implementation, enforcement, adaptability led to intl. soft lawSpendzharova (2014)Regulatory preferences for centralisation in EMU depend on foreign ownership and domestic bank internationalisationQuaglia (2017a)International firms facilitated international dispute settlementQuaglia (2017b)Dominant banks and competence caused US and UK dominanceRole of G formats (G7, G8, G20) and FSBG. Cheng (2016)Role of G20 as global broker for strengthened safety netsGstoehl (2007)G8 ​+ ​IOs, network delegates negotiation, especially where dominant shareMonticelli (2019)FSB new element in global financial governanceEffects of implementationBoissay F. et al. (2019)Meta study on evidence of post-crisis financial regulation (80 studies 2013–18)FSB (2018a, 2018b, 2019)Effect on infrastructure finance, on OTC derivatives and on SMEsKnight M. (2018)International banking rules shifted risks to less regulated non-bank sectorSchuknecht (2019)Fiscal risk shifted to market based finance Annex Table 2Compliance with FSB and BCBS Financial Regulation Agenda: Hypotheses and VariablesAnnex Table 2Dependent variables1. Resilience of banksMinimum capital requirements2. Short term fundingLiquidity Coverage Ratio3. Long term fundingNet Stable Funding Ratio4. Recovery and Resolution planningRecovery & resolution planning requirements5. Resolution powersTemporary stay/bail-in/transfer powers for banks6. Derivatives marketsMargin requirements for non-centrally cleared derivativesIndependent variablesExpected signInternational cooperation hypothesisSpecial interest hypothesis1. Size of financial industry and externalitiesCommon interest cooperationSelf-interested cooperation driven by large playersNarrow special interestsSize of the banking sectorBanking assets/GDP(+)(+)(−)Presence of systemic institutionG-SIB presence(+)(+)(−)G-SIB presence interacted with size of the banking sector(0)(+)(−)Scope of applicability of regulationRegulation applies to internationally active banks only(0)(+)(−) Large banks(+) Small banksConcentration of banking systemShare of top (5) banks/total banking assets(+)(+)(−)Foreign ownership of banksShare of bank assets with foreign ownership(+)(+)(−)2. Financial health of banksCommitment deviceSpecial interest incentivesCapital ratio(−)(+)Liquidity ratio(−)(+)Bank solvency(−)(+)3. Control variablesImplementation capacitySpecial interest incentivesGovernance quality(+)(−)GDP per capita(+)(−)GDP(+)(−)Public support for regulationDecreased ownership over commitmentsChange of government(+)(−) Annex Fig. 1Dependent variables: progress in implementation of requirements.Annex Fig. 1 Annex Table 3Correlation matrix of independent variablesAnnex Table 3Size financial systemG-SIBScope (Capital req.)Scope (Liquidity req.)Bank concentrationForeign ownershipCapital ratioLiquid assetsBank solvencyGovernment effectivenessChange in governmentGDPG-SIB0.37Scope (Capital req.)0.330.19Scope (Liquidity req.)0.320.240.71Bank concentration−0.61−0.42−0.010.11Foreign ownership−0.010.15−0.02−0.05−0.06Capital ratio0.210.420.100.11−0.11−0.21Liquid assets0.39−0.12−0.460.08−0.340.160.10Bank solvency0.13−0.320.400.230.220.230.000.01Government effectiveness0.740.430.390.32−0.48−0.040.420.420.00Change in government0.090.060.140.050.01−0.100.190.020.050.14GDP0.050.750.210.06−0.13−0.030.53−0.32−0.210.210.19GDP per capita0.570.470.300.42−0.400.170.350.40−0.140.880.110.20 Annex Table 4Robust regression of minimum capital requirements using alternative coding of dependent variableAnnex Table 4Ordered logistics regressionAlternative minimum capital requirement variable(1)(2)(3)(4)Externalities and lobbying incentivesSize of banking sectorbetween0.0040.0090.0020.004∗∗(0.01)(0.01)(0.00)(0.00)within0.160∗∗∗0.175∗∗∗0.045∗∗∗0.041∗∗∗(0.03)(0.03)(0.01)(0.01)Presence of a G-SIBbetween−5.342∗∗∗−1.733−2.612∗∗∗−0.632(1.67)(3.15)(0.65)(0.73)Presence of a G-SIB ∗ Size of banking sectorbetween0.034∗∗∗0.0120.017∗∗∗0.005(0.01)(0.02)(0.00)(0.00)within−0.134∗∗−0.109∗−0.033−0.023(0.05)(0.06)(0.02)(0.03)Scope of regulations’ applicability (int’l banks)between0.2911.108∗0.0710.257(0.49)(0.63)(0.19)(0.17)Bank concentrationbetween0.001−0.028−0.003−0.013∗∗(0.01)(0.02)(0.00)(0.01)within−0.048−0.0560.0050.005(0.07)(0.07)(0.03)(0.03)Foreign ownership of banking assetsbetween−0.014−0.019∗−0.004−0.005∗∗(0.01)(0.01)(0.00)(0.00)Commitment device and lobbying incentivesCapital ratiobetween0.128−0.3110.028−0.121∗(0.13)(0.23)(0.05)(0.07)within0.3200.3480.1670.128(0.31)(0.31)(0.11)(0.13)Bank solvencybetween0.130∗∗∗0.159∗∗∗0.059∗∗∗0.067∗∗∗(0.04)(0.05)(0.02)(0.01)within0.2520.1790.0740.036(0.19)(0.20)(0.08)(0.08)Control variablesGovernment effectivenessbetween−2.599∗∗−0.770∗∗∗(1.02)(0.26)within1.0890.769(1.76)(1.04)Change of governmentwithin1.541∗∗∗0.377(0.48)(0.27)Log GDP per capitabetween1.325∗∗0.350∗∗∗(0.52)(0.12)Log GDPbetween−0.768−0.363∗∗(0.48)(0.15)Constant−0.0959.045∗∗(0.71)(4.53)Number of observations126126126126Number of groups18181818R2 (between)0.6970.825R2 (within)0.2910.326Standard errors in parentheses. ∗ ​= ​p ​< ​0.10, ∗∗ ​= ​p ​< ​0.05, ∗∗∗ ​= ​p ​< ​0.01., (© 2020 Published by Elsevier B.V.)

Most cases of decompression sickness that occur at altitude resolve upon descent to lower altitudes. Before the use of hyperbaric therapy, cases that did not resolve accounted for some of the most difficult medical management problems in military aerospace medicine. On 27 March, 1941, the U.S. Navy Diving School successfully used hyperbaric therapy for a case of altitude-induced decompression sickness that did not resolve on return to ground level. Since then, over 145 such cases have been treated by hyperbaric therapy. At first, treatments involved using compressed air, with varying success. Current medical management of altitude-induced decompression sickness requires immediate compression to 2.8 ATA, equivalent to 60 ft of sea water (FSW) pressure, and a series of intermittent oxygen and air breathing periods during the subsequent slow decompression to surface. This report confirms the treatment recommendations set forth by Behnke and Downey, and crystallized by Goodman in 1964. Conclusions are based on treatment experience in the management of 120 cases in U.S. Air Force hyperbaric chambers, and a survey of hyperbaric facilities which have treated 25 other cases.