Regulation has become more stringent with the impending introduction of what is known as the Basel III framework. There was, however, always a concern that the regulatory pendulum would swing too far in the other direction, and there is the danger that their implementation may further impede the slow global recovery.
In the Eurozone for example, the need to increase bank capital has contributed to the reluctance of banks to lend. Higher capital adequacy ratios are ideally achieved through raising capital, but in the prevailing economic climate this is difficult and expensive.