Since the 2007–08 financial crisis, global regulators have engaged in a lengthy struggle to reshape the international financial system to make it more resilient under stress.Two recent proposals: the "Foreign Banking Organization" proposal of the U.S. Board of Governors of the Federal Reserve System and the United Kingdom’s "ring-fencing" plan are purportedly a part of this effort. The proposals are intended to protect national financial systems from the risks posed by a failure of one or more global, interconnected banking organizations operating within national borders.
As such, the proposals may merely amount to national regulators adopting a parochial, protectionist, or "home country first" approach to regulation, which may insulate banks without reforming them, and could slow world economic growth.
