For example, in terms of banks’ capital, an internationally common new regulatory framework, namely, Basel III, has recently been agreed on. Both the quality and the quantity of bank’s capital will be enhanced, albeit gradually, through increasing the ratios of common equities and Tier I that have a high loss absorbing capacity at the time of bankruptcy.
Like the so-called “Volcker Rule” in the United States, there are also moves to directly regulate banks’ high risk businesses such as proprietary trading and investment in hedge funds.