Banking Law

answer one of the following question/s:

1. “In response to the COVID shock, many countries have relaxed macroprudential policy tools to enable

banks to absorb expected losses and support the continued provision of credit to the real economy.”

Discuss the challenges in implementing macroprudential tools to prevent or mitigate risks to financial

stability.

2. “Basel III is a clear improvement over its predecessors, as it requires banks to hold more, higherquality capital and introduces macroprudential standards that address systemic risks in the financial

sector. Yet many argue that the changes fall far short of what is needed.” E Jones, The Political

Economy of Bank Regulation in Developing Countries: Risk and Reputation (2020). Discuss.