March 13, 2009
The Basel Committee Expands to the Developing World
Posted by David Zaring

Many of the most prominent - and effective? - international institutions are run by rich countries, and not without controversy.  The Basel Committee on Banking Supervision has been criticized for its exclusivity, but I didn't think this was in the works:

the Basel Committee on Banking Supervision decided to expand its membership and invite representatives from the following countries to join the Committee: Australia, Brazil, China, India, Korea, Mexico and Russia.

Why add the BRIC countries?  One possibility is to make Basel look a bit more like the G20, which has been entrusted with coordinating the global response to the financial crisis, and may continue to retain a coordinating role in all things global and economic.  And another might be an effort to preclude the development of a base for an alternative to the capital adequacy standards of the committee.  Regardless, the expansion is likely to make it more difficult for Basel - which sort of operates on consensus - to come up with standards for Basel III.

UPDATE: The Financial Stability Forum, of which the BC is a member, and which is also headquartered in Basel, has done something uncoincidentally similar:

The Financial Stability Forum (FSF) decided at its plenary meeting in London on 11-12 March to broaden its membership and to invite as new members the G20 countries that are not currently in the FSF. These are Argentina, Brazil, China, India, Indonesia, Korea, Mexico, Russia, Saudi Arabia, South Africa and Turkey. In addition, Spain and the European Commission will also become FSF members

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