Are the standards and practices under the Basel accords enforceable by law, and how are they enforced?
The Basel Committee on Banking Standards has no enforcement authority. Each nation is expected to implement the Basel standards through national laws or regulations, as best suited to its own system. The voluntary nature of a county’s adherence to Basel standards was underscored as the committee prepared to issue the Basel III framework. Four days before Basel III was announced, France’s economic minister, Christine Lagarde, said her country would follow the standards only if the United States follows them . In the United States, four federal bank regulatory agencies implement the standards through public rulemaking proceedings, which can entail a very lengthy process. In Europe, the Basel II standards were implemented through the Capital Requirements Directive issued by the European Union.
