The complex implementation that Basel 2 entails should not be seen in isolation in the area of banking regulation. It is in fact part of a series of actions initiated at the international level since the late 1990’s to overhaul financial supervision and banking regulation in particular. The scale of the Asian Crisis of 1997 brought to the fore the notion of “macroprudential surveillance”.
On the other hand, measures taken to increase stability in the banking system through mergers may lead to reduced competition. When a merger would cause a large concentration in a market that is, or becomes, highly concentrated, we need to give special attention to the impact on competition.