Resources for Basel II Capital Accord (Basel II)

It's High Time To Re-Regulate Banking

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The shocking and reckless practices of banks behind the recent plunge in global markets illustrates just how far they have veered from reality. Stricter, more effective supervision is necessary, and the banks' perverse bonus systems must be radically revamped.

Frenchman Jerome Kerviel offered a particularly enlightening commentary on the steadily worsening crisis in the financial markets. Just as a reminder, Kerviel is one of the young traders whose unauthorized trades resulted in the stunning loss of €4.9 billion ($7.66 billion) for his employer, French bank Societe Generale. When questioned by prosecutors, Kerviel offered this logical explanation for his actions: "Working in this profession, you lose your sense for sums." Then he added: "You get a little carried away."

The sad and, for many contemporaries, extremely costly truth is that the entire financial sector has apparently lost its sense for sums in recent years. We are all in the hands of tens of thousands of men and women like Kerviel, who pursue their business deals in banks around the globe.
Billions (yes, billions, not paltry millions) have been at play for months. No part of the money business seems truly clean today. After the debacles of investment banks like Merrill Lynch and Bear Stearns, problems are beginning to pop up among hedge funds, and there are already rumors of difficulties at credit card companies in the United States.

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