Risk-driven global compliance regimes in banking and accounting: the new Law Merchant

Abstract

Powerful, technically complex international compliance regimes have developed recently in certain professions that deal with risk: banking (the Basel II regime), accountancy (IFRS) and the actu-arial profession. The need to deal with major risks has acted as a strong driver of international co-operation to create enforceable international semilegal systems, as happened earlier in such fields as international health regulations. This regulation in technical fields contrasts with the failure of an international general-purpose political and legal regime to develop. We survey the new global regulatory systems in the actuarial, banking and accounting fields, with a view to showing how the need to deal reasonably with risk has resulted in an international de facto law solidly based on correct abstract principles of probability.