Basel II will lead to more instability, critic argues

LONDON -- The Basel II bank capital accord will result in more banking instability and more pro-cyclicality, where bank actions taken in response to solvency rules reinforce economic and market cycles, a leading critic of the accord said in October.

"This will be felt most at the periphery of the financial system not at the core, in emerging markets and small and medium enterprises," Avinash Persaud said in an inaugural lecture as professor of commerce at Gresham College, London.

"Ironically