NEW GOVERNANCE, FINANCIAL REGULATION, AND CHALLENGES TO LEGITIMACY: THE EXAMPLE OF THE INTERNAL MODELS APPROACH TO CAPITAL ADEQUACY REGULATION.

The article discusses the importance of the capital adequacy regulation of the financial institutions in the U.S. It explores the formation of the Basel Committee on Banking Supervision as the international bank regulatory policy coordinator. It highlights the committee's three central achievements which include Basel Accord of 1988, the market risk amendments of 1996, and Basel II of 2004. It provides an overview of new governance theory.