Law, Democracy and Development

Abstract

The efficacy of the existing international financial regulation and adoption of an institutionalised form of regulation are among the global financial governance issues which have been well addressed by scholars in the field. The less investigated but directly related and worth considering issue is the impact of the contemporary global financial governance system on fundamental values like the rule of law. This article examines this less explored yet worth investigating issue with a focus on Basel III, namely, how far does the regulatory process under Basel III, as it stands today, inhibit or foster the rule of law. Soft law, informal groups of this regulatory network and the regulatory process are analyzed in the light of the relevant elements of the rule of law. The article shows that the accountability deficit and lack of inclusive governance in the Basel III regulatory system have inhibited the advancement of the rule of law which should have been fostered to build legitimacy in this regulatory system.