After the 2008 financial crisis and subsequent bailout of major banks, global regulators set about creating new safeguards for the industry. However, critics say there is an inherent contradiction at the heart of global banking reform measures – and it is making it harder for banks to put their money where it is needed most.
An unintended consequence of the latest rules from the Basel Committee is that they constrain banks from lending on infrastructure projects in the developing world, according to market watchers. “Basel III means banking is stepping back from our markets,” says Cameron Khosrowshahi, investment officer in the private capital office of development agency USAID.
