They also pledged to increase the requirements for regulated financial institutions. Within a relatively short time frame, the foundations for reform were laid. These concerned Too-BigTo-Fail (TBTF), the OTC markets, CCPs and the insurance sector. And most importantly with respect to the banks at the core of the financial system: the Basel III agreements. The implementation of this financial reform agenda is advancing2.
Initially the focus was mostly on the banks, and this has led to at least four positive developments. First of all, the Basel III reforms increased both the quantity and the quality of capital that banks must hold.