1st Edition

Bank Regulation, Risk Management, and Compliance Theory, Practice, and Key Problem Areas

By Alexander Dill Copyright 2020
    340 Pages
    by Informa Law from Routledge

    340 Pages
    by Informa Law from Routledge

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    Bank Regulation, Risk Management, and Compliance is a concise yet comprehensive treatment of the primary areas of US banking regulation – micro-prudential, macroprudential, financial consumer protection, and AML/CFT regulation – and their associated risk management and compliance systems. The book’s focus is the US, but its prolific use of standards published by the Basel Committee on Banking Supervision and frequent comparisons with UK and EU versions of US regulation offer a broad perspective on global bank regulation and expectations for internal governance.

    The book establishes a conceptual framework that helps readers to understand bank regulators’ expectations for the risk management and compliance functions. Informed by the author’s experience at a major credit rating agency in helping to design and implement a ratings compliance system, it explains how the banking business model, through credit extension and credit intermediation, creates the principal risks that regulation is designed to mitigate: credit, interest rate, market, and operational risk, and, more broadly, systemic risk. The book covers, in a single volume, the four areas of bank regulation and supervision and the associated regulatory expectations and firms’ governance systems. Readers desiring to study the subject in a unified manner have needed to separately consult specialized treatments of their areas of interest, resulting in a fragmented grasp of the subject matter. Banking regulation has a cohesive unity due in large part to national authorities’ agreement to follow global standards and to the homogenizing effects of the integrated global financial markets.

    The book is designed for legal, risk, and compliance banking professionals; students in law, business, and other finance-related graduate programs; and finance professionals generally who want a reference book on bank regulation, risk management, and compliance. It can serve both as a primer for entry-level finance professionals and as a reference guide for seasoned risk and compliance officials, senior management, and regulators and other policymakers. Although the book’s focus is bank regulation, its coverage of corporate governance, risk management, compliance, and management of conflicts of interest in financial institutions has broad application in other financial services sectors.

    Chapter 6 of this book is freely available as a downloadable Open Access PDF at http://www.taylorfrancis.com under a Creative Commons Attribution-Non Commercial-No Derivatives (CC-BY-NC-ND) 4.0 license. 

    List of figures

    List of tables

    List of abbreviations

    Table of legal sources

    Note about the author



    Part I Foundations

    Chapter 1 The banking business model and rise of the financial conglomerate

    Chapter 2 The bank regulatory framework and formation and conveyance of regulatory expectations

    Chapter 3 Managing banks’ risks through a corporate governance framework

    Part II Primary areas of bank regulation and internal governance

    Chapter 4 The role of risk management and compliance in micro-prudential capital regulation

    Chapter 5 The role of risk management and compliance in micro-prudential oversight

    Chapter 6 The role of corporate governance in macro-prudential regulation of systemic risk

    Chapter 7 The capital solution to systemic risk: Risk management and compliance implications

    Chapter 8 The structural solution to systemic risk: Risk management and compliance implications

    Chapter 9 The role of risk management and compliance in consumer protection regulation

    Chapter 10 The role of risk management and compliance in the payments system: AML/CFT regulation

    Chapter 11 The future of bank regulation, risk management, and compliance




    Alexander Dill is Lecturer in the Financial Mathematics Program at the University of Chicago and Lecturer in Law at the UCLA School of Law. He is a recognized expert on the financial markets and the regulatory, risk management, and compliance frameworks that apply to them. He worked in the finance industry for nearly 30 years, first in private corporate law practice and subsequently at the US Securities and Exchange Commission and Moody’s Investors Service.

    'This is a comprehensive guide to US banking regulations which have evolved into a more invasive supervisory approach compared to the market-based approach that existed before the Global Financial Crisis (GFC). 1 The book covers the banking business, the unique features of banks’ corporate governance and conflicts of interest (COIs), and the primary areas of banking regulations and the associated supervisory expectations for risk management and compliance (p.6).'

    Dr Sau Wai Law, Assistant Professor, Hong Kong Shue Yan University