The Basel Committee on Banking Supervision (BCBS) is the most important international standard setting body in the field of financial regulation. Its remit concerns banking regulation, and particularly prudential requirements of internationally active banks. The fundamental question addressed by this chapter is what explains the resilience of the BCBS and its standards, particularly in the aftermath of the 2007-2008 global financial crisis. The chapter is organised as follows: first, there is an introduction to the BCBS and the standards its members develop. Second, the failures of the Basel regime leading to the financial crisis are highlighted, as well as some possible explanations thereof. Thereafter follows a discussion about the reasons why the fundamental features of the regime are still in place even after its evident inadequacies and why the reforms adopted in the wake of the crisis are a way to safeguard the resilience of such features.

Institutional investors channel savings to investments. The chapter looks at banks, insurers and pension funds, and their ability to foster sustainability. Their investment decisions have a crucial role in either making some activities possible or others not. Different institutional institutions, depending on their individual characteristics, operate under different sets of prudential regulation, tailored to their specifics. There is a topical debate on how prudential supervision is best used to foster sustainable investment. The alternative approaches are either a neutral risk-based approach, or one that either incentivises sustainable investments through lower capital charges or penalises ‘brown’ ones through higher charges. Different stakeholders have different thoughts on the best approach, with supervisors generally supporting an orthodox risk-based approach and the investors, while generally supporting the risk-based approach, having some reservations on the issue.The conclusion will be that the risk-based approach will be the sustainable financial approach. After all, rather just a climate catastrophe instead of a climate catastrophe connected to a financial catastrophe.