There is a broad international process underway, via the G20, the BIS and the IMF, to come up with new capital and liquidity rules to be applied around the world to replace Basle 2 (see here). However, beyond re-working these rules, the financial crisis has still left lots of knotty issues unresolved, such as how to intervene and unwind large complex financial institutions that are in trouble, how to regulate derivatives and whether more severe limitations should be placed on the activities of banks (perhaps through a return to Glass-Steagal style restrictions.)
Now that healthcare reform is off the agenda, there is a pretty serious discussion in the US now about financial reform: Paul Krugman has devoted his last two New York Times op-ed columns to it (here and here.) Here’s a nice summary of the current state of play. As always with US legislation, the process is bizarrely complicated and riddled with horse-trading, with a House bill and Senate bill, potential reconciliation, and a role for the White House and Treasury Department. But, to be fair to them, the process usually ends up forcing a serious discussion of all the key issues.
It seems that if this kind of thing is going to happen over here, it will need to be done at EU level, presumably with an active role for the European Systemic Risk Board (which comes into existence when?) Perhaps I’m missing it but I don’t get a sense that there is a parallel process at European level that mirrors the current US debate. It may be too much to hope for that Europe, with its patchwork quilt of different types of banks, regulations and regulators, will ever get its act together on this front.