List the major international treaties affecting the world banking industry.
Question
List the major international treaties affecting the world banking industry.
Solution
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Basel Accords: These are a set of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. They aim to ensure financial institutions have enough capital on account to meet obligations and absorb unexpected losses. There are three accords - Basel I, Basel II, and Basel III, each introduced in response to various financial crises.
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The Bretton Woods Agreement: Established in 1944, this agreement set up a system of rules, institutions, and procedures to regulate the international monetary system. The two main institutions created as a result were the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now part of the World Bank Group.
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The General Agreement on Trade in Services (GATS): This is a treaty of the World Trade Organization (WTO) that entered into force in January 1995. The treaty was created to extend the multilateral trading system to the service sector, in the same way, the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.
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The Dodd-Frank Act: Although a U.S. law, it has significant implications for foreign banks operating in the U.S. It was passed in response to the 2008 financial crisis and includes numerous provisions intended to reduce systemic risk and protect consumers.
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The Foreign Account Tax Compliance Act (FATCA): This is a 2010 United States federal law requiring all non-U.S. foreign financial institutions (FFIs) to search their records for customers with indicia of U.S.-person status, such as a U.S. place of birth, and to report the assets and identities of such persons to the U.S. Department of the Treasury.
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The European Union's Single Rulebook: This is a set of legislative measures covering all EU member states, aimed at creating a safer and more responsible financial sector. It includes the Capital Requirements Directive IV (CRD IV), the Bank Recovery and Resolution Directive (BRRD), and the Single Resolution Mechanism Regulation (SRMR).
These are just a few examples of the major international treaties and regulations affecting the world banking industry.
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