Abstract

The capital adequacy of financial intermediaries is one of the key issues dramatically raised by the financial crisis. Review of the regulation in this field is underway and aims to reinforce the Basel 2 regime. This introduction presents the contributions in this section, which critically analyse the most important aspects of the proposals: more and higher-quality capital, improved risk coverage, global liquidity standards, counter-cyclical measures and specific rules for institutions of systemic importance. The problems of compensation policies, governance and reputational risk receive close consideration. Solvency 2 for the insurance industry is also discussed.