Current regulation
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International regulation is regulation that occurs at the international level, often exercised by international organizations. An advantage of international regulation is that it allows localities and the individuals in them to be held accountable for the impact that their actions (e.g. pollution) have on other localities.
A series of powerful international regulatory regimes have arisen especially in fields dealing with risk, such as banking, accountancy and the actuarial profession. [1] In banking, the Basel Accords regulate a wide range of bank behavior, such as capital adequacy, the requirement to have capital reserved against risk. In accountancy, the International Financial Reporting Standards (IFRS) have replaced many national accounting standards to enable international comparability of reporting of accounts. The International Actuarial Association is working on standardization of international practice.
Although there is no international government to issue regulations, negotiations between industry bodies and national governments have often succeeded in orchestrating regulatory regimes that are obeyed across most nations. [2]
The international nature of the sea has resulted in two thousand years of development of maritime law and the law of the sea (such as the medieval Rolls of Oléron), which regulate navigation, the freedom of the seas and the use of resources such as minerals. In the mid-nineteenth century, British domination of navigation resulted in British rules being adopted as International Regulations for Preventing Collisions at Sea, and similarly for the Plimsoll line to prevent overloading of vessels. The need for safety and rescue at sea led to the building of remote lighthouses and the standardization of distress signals in the International Radiotelegraph Convention (1906). In response to the sinking of the Titanic, the International Convention for the Safety of Life at Sea of 1914 laid down standards for lifeboats and continuous radio watches. Navigation on the Rhine, which flows through many countries, was controlled by the Central Commission for Navigation on the Rhine, established after the 1815 Congress of Vienna.
Resources accessible by sea have been subject to overexploitation because of lack of regulation. Concern over overfishing in the North Sea led to the creation of the International Council for the Exploration of the Sea in 1902, which eventually sponsored limits on fishing and cooperation in marine science. [3] Despite the collapse of whale populations from unrestrained whaling by many countries, regulation was slow in coming. The 1931 Geneva Convention for Regulation of Whaling and the 1937 International Agreement for the Regulation of Whaling had limited effectiveness and were replaced by the more effective International Convention for the Regulation of Whaling which came into effect in 1948. Rival claims to Antarctica were put aside in the Antarctic Treaty of 1961 which preserved Antarctica as a demilitarized zone limited to scientific research. The Outer Space Treaty of 1967 extends similar principles to ensure that outer space is not divided into exclusive zones.
The dangers of miscommunication at sea by multilingual crews led to the need for an international maritime language. With British domination of the seas from the eighteenth century, that was inevitably English. [4] English requirements for maritime communication have developed into the simplified Seaspeak. Aviation followed, and in 1951 the International Civil Aviation Organization (ICAO) recommended that English be used exclusively in air communications. The recommendation was followed. ICAO adopted in 1956 the NATO Phonetic Alphabet (Alfa, Bravo, Charlie ...) for spelling out words when they might be misunderstood. These developments were important in making English the international language generally.
International trade required the development of binding customs applicable across international boundaries, such as the medieval law merchant. Customs of diplomatic immunity also have a long history; they are now codified in the Vienna Convention on Diplomatic Relations (1961).
The Universal Postal Union, established in 1874, coordinated international postage so that payment of postage in any country ensured its delivery anywhere. The International Telegraph Union (later International Telecommunication Union) was formed in 1865 to standardize telegraphic communication.
International Sanitary Conferences, beginning in 1851, standardized quarantine arrangements for infectious diseases. The World Health Organization has continued such work, in areas such as coordinating responses to pandemics.
The 1864 Geneva Convention began the regulation of warfare, initially providing for the protection of those aiding sick and wounded soldiers. The Hague Conventions of 1899 and 1907 attempted to outlaw barbarities in war but had little effect in World War I. However the 1925 Geneva Protocol outlawing chemical and biological warfare was largely adhered to in World War II, which did not see a repetition of the chemical warfare of World War I.
British domination of navigation led to Greenwich Mean Time becoming a de facto international time standard from the eighteenth century. The 1884 International Meridian Conference in Washington DC determined that the Greenwich Meridian would be taken to be zero degrees longitude, with a view to time coordination. National legislation on time zones gradually created an agreed system of zones, defined in terms of offsets from Universal Coordinated Time.
The metric system of weights and measures, imposed in Revolutionary France in 1799, gained acceptance during the nineteenth century, especially in science. The Metre Convention, signed in Paris in 1875 by 17 countries, created the International Bureau of Weights and Measures to define the units of the metric system.
Standardization of bolts and screws and of machine parts developed gradually in the nineteenth century. The International Federation of the National Standardizing Associations was founded in 1926 with a broad remit to enhance international cooperation for all technical standards and specifications. It was superseded in 1947 by the International Organization for Standardization (ISO) which sets a wide range of standards in thousands of areas. [5] (list)
The first International Electrical Congress in Paris in 1881 defined or instituted processes for defining basic electrical units such as the volt and ampere. The subsequent International Electrotechnical Commission, set up in 1906, developed standards for electrical and electronic technologies.
Although banks in the nineteenth century did not create an international authority, the gold standard (convertibility of currencies into gold at fixed rates) created de facto international coordination of currencies. Adopted by the Britain in 1821 and by other major currencies in the later nineteenth century, it collapsed with the outbreak of World War I in 1914 and revivals in the 1920s were unsuccessful.
The Bank for International Settlements, established in Basel in 1930 to facilitate German reparations, soon became a means of cooperation between national central banks and later set standards of capital adequacy for banks. The Bretton Woods system, established in 1945, regulated exchange rates between currencies until the 1970s.
| | This section needs expansion. You can help by adding to it. (July 2021) |
| | This section needs expansion. You can help by adding to it. (July 2021) |
The International Telecommunication Union is a specialized agency of the United Nations responsible for all matters related to information and communication technologies. It was established on 17 May 1865 as the International Telegraph Union, making it the oldest UN agency.
The United Nations Convention on the Law of the Sea (UNCLOS), also called the Law of the Sea Convention or the Law of the Sea Treaty, is an international agreement that establishes a legal framework for all marine and maritime activities. As of June 2016, 167 countries and the European Union are parties.
The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through its meetings, programmes and through the Basel Process – hosting international groups pursuing global financial stability and facilitating their interaction. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled by either a government or non-government organization. Financial regulation has also influenced the structure of banking sectors by increasing the variety of financial products available. Financial regulation forms one of three legal categories which constitutes the content of financial law, the other two being market practices and case law.
The global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international flows of financial capital for purposes of investment and trade financing. Since emerging in the late 19th century during the first modern wave of economic globalization, its evolution is marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets. In the late 1800s, world migration and communication technology facilitated unprecedented growth in international trade and investment. At the onset of World War I, trade contracted as foreign exchange markets became paralyzed by money market illiquidity. Countries sought to defend against external shocks with protectionist policies and trade virtually halted by 1933, worsening the effects of the global Great Depression until a series of reciprocal trade agreements slowly reduced tariffs worldwide. Efforts to revamp the international monetary system after World War II improved exchange rate stability, fostering record growth in global finance.
The terms international waters or trans-boundary waters apply where any of the following types of bodies of water transcend international boundaries: oceans, large marine ecosystems, enclosed or semi-enclosed regional seas and estuaries, rivers, lakes, groundwater systems (aquifers), and wetlands.
Law of the sea is a body of international law governing the rights and duties of states in maritime environments. It concerns matters such as navigational rights, sea mineral claims, and coastal waters jurisdiction.
Operational risk is "the risk of a change in value caused by the fact that actual losses, incurred for inadequate or failed internal processes, people and systems, or from external events, differ from the expected losses". This definition, adopted by the European Solvency II Directive for insurers, is a variation adopted from the Basel II regulations for banks. The scope of operational risk is then broad, and can also include other classes of risks, such as fraud, security, privacy protection, legal risks, physical or environmental risks. Operational risks similarly may impact broadly, in that they can affect client satisfaction, reputation and shareholder value, all while increasing business volatility.
Bank regulation is a form of government regulation which subjects banks to certain requirements, restrictions and guidelines, designed to create market transparency between banking institutions and the individuals and corporations with whom they conduct business, among other things. As regulation focusing on key factors in the financial markets, it forms one of the three components of financial law, the other two being case law and self-regulating market practices.
Basel II is the second of the Basel Accords,, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision.
A capital requirement is the amount of capital a bank or other financial institution has to have as required by its financial regulator. This is usually expressed as a capital adequacy ratio of equity as a percentage of risk-weighted assets. These requirements are put into place to ensure that these institutions do not take on excess leverage and risk becoming insolvent. Capital requirements govern the ratio of equity to debt, recorded on the liabilities and equity side of a firm's balance sheet. They should not be confused with reserve requirements, which govern the assets side of a bank's balance sheet—in particular, the proportion of its assets it must hold in cash or highly-liquid assets. Capital is a source of funds not a use of funds.
In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Regulatory compliance describes the goal that organizations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations. Due to the increasing number of regulations and need for operational transparency, organizations are increasingly adopting the use of consolidated and harmonized sets of compliance controls. This approach is used to ensure that all necessary governance requirements can be met without the unnecessary duplication of effort and activity from resources.
The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1974. The committee expanded its membership in 2009 and then again in 2014. In 2019, the BCBS has 45 members from 28 Jurisdictions, consisting of Central Banks and authorities with responsibility of banking regulation. It provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide. The Committee frames guidelines and standards in different areas – some of the better known among them are the international standards on capital adequacy, the Core Principles for Effective Banking Supervision and the Concordat on cross-border banking supervision. The Committee's Secretariat is located at the Bank for International Settlements (BIS) in Basel, Switzerland. The Bank for International Settlements (BIS) hosts and supports a number of international institutions engaged in standard setting and financial stability, one of which is BCBS. Yet like the other committees, BCBS has its own governance arrangements, reporting lines and agendas, guided by the central bank governors of the Group of Ten (G10) countries.
The Central Bank of Armenia is the central bank of Armenia with its headquarters in Yerevan. The CBA is an independent institution responsible for issuing all banknotes and coins in the country, overseeing and regulating the banking sector and keeping the government's currency reserves. The CBA is also the sole owner of the Armenian Mint.
The Office of the Superintendent of Financial Institutions is an independent agency of the Government of Canada reporting to the Minister of Finance created "to contribute to public confidence in the Canadian financial system". It is the sole regulator of banks, and the primary regulator of insurance companies, trust companies, loan companies and pension plans in Canada.
Maritime security is an umbrella term informed to classify issues in the maritime domain that are often related to national security, marine environment, economic development, and human security. This includes the world's oceans but also regional seas, territorial waters, rivers and ports, where seas act as a “stage for geopolitical power projection, interstate warfare or militarized disputes, as a source of specific threats such as piracy, or as a connector between states that enables various phenomena from colonialism to globalization”. The theoretical concept of maritime security has evolved from a narrow perspective of national naval power projection towards a buzzword that incorporates many interconnected sub-fields. The definition of the term maritime security varies and while no internationally agreed definition exists, the term has often been used to describe both existing, and new regional and international challenges to the maritime domain. The buzzword character enables international actors to discuss these new challenges without the need to define every potentially contested aspect of it. Maritime security is of increasing concern to the global shipping industry, where there are a wide range of security threats and challenges. Some of the practical issues clustered under the term of maritime security include crimes such as piracy, armed robbery at sea, trafficking of people and illicit goods, illegal fishing or marine pollution. War, warlike activity, maritime terrorism and interstate rivalry are also maritime security concerns.
The Central Bank of the United Arab Emirates is the state institution responsible for managing the currency, monetary policy and banking regulation in the United Arab Emirates.
Risk-weighted asset is a bank's assets or off-balance-sheet exposures, weighted according to risk. This sort of asset calculation is used in determining the capital requirement or Capital Adequacy Ratio (CAR) for a financial institution. In the Basel I accord published by the Basel Committee on Banking Supervision, the Committee explains why using a risk-weight approach is the preferred methodology which banks should adopt for capital calculation:
Basel III is a global, voluntary regulatory framework on bank capital adequacy, stress testing, and market liquidity risk. This third installment of the Basel Accords was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007–08. It is intended to strengthen bank capital requirements by increasing minimum capital requirements, holdings of high quality liquid assets, and decreasing bank leverage.
International piracy law is international law that is meant to protect against piracy. Throughout history and legal precedents, pirates have been defined as hostis humani generis, the enemy of all mankind. The United Nations has codified much of the law in the United Nations Convention on the Law of the Sea (UNCLOS), which defines different types of piracy and ways to combat it.