How did the global financial crisis of 2008 influence banking regulations?

The global financial crisis of 2008 had a profound impact on banking regulations worldwide. The crisis exposed weaknesses in the financial system that needed to be addressed to prevent similar events in the future. In response to the crisis, significant regulatory reforms were implemented to enhance financial system stability and mitigate systemic risk.

Key Regulatory Reforms:

One of the key regulatory changes post-2008 was the establishment of the Financial Stability Board (FSB), which coordinates international financial regulations and monitors their implementation. The Basel Accords were also revised to strengthen capital requirements for banks and improve risk management practices.

In the United States, the Dodd-Frank Act was enacted to provide greater oversight of financial institutions and enhance market regulations. The Act established regulatory bodies such as the Consumer Financial Protection Bureau (CFPB) and imposed stricter regulations on banks to prevent excessive risk-taking.

Overall, the global financial crisis of 2008 prompted significant changes in banking policies to ensure the stability of the financial system and prevent future economic downturns.