Vol. 6, Issue 12, Part D (2020)

Abstract
The banking industry is the lifeline of any economy. It is one of the most important pillars of the financial sector. Development of any country is highly dependent on the performance of the banking industry. For an economy to remain healthy and going, it is important that the banking system grows fast and yet be stable. Enhancing the banking sector’s safety and stability has been the thrust of the post financial crisis policy reforms and strengthening capital regulation of banks is important among them. The main objectives of this improved capital regulation framework are to strengthen global capital and liquidity regulations with the goal of promoting a more resilient banking sector and to improve the banking sectors ability to absorb shocks arising from financial and economic stress. Due to the importance in the financial stability of the country, banks are highly regulated in most of the countries. The collapse of financial institution in one country can also lead to sequential collapse of financial institutions in other countries, warranting that global minimum prudential levels shall be implemented. More so, cross-country discrepancies in financial regulation have significant ramifications for the competitiveness of financial firms.