They are designed to ensure not only safer and sounder banks but also a level playing field. So if reforms are not implemented as agreed, the playing field will become uneven, opening the door to regulatory arbitrage. But regulation is not the only game in town, of course. Supervision counts too.
And although supervisors need rules to guide their work, they see that not everything can be or should be captured by rules. Global reforms such as those devised in Basel and their transposition into European law cannot be perfectly tailored to each and every business model that banks pursue. At best, rules can cover the average case.