A1.(a)Outline and explain the principal features of micro-prudential regulationusing examples from Basel I and Basel II to support your answer.(30 marks)(b)"It is perhaps banal to point out that the reason that we try to preventbanking crisis is that the costs to society are invariably enormous and exceed the private costs to individual financial institutions.We regulate in order to internalise these externalities"Reference: M.Brunnermeier, C.Goodhart, A.Crockett,A.Persaud andH.S.Shin (2009).The Fundamental Principles of Financial Regulation.Geneva Reports on the World Economy 11.Outline the causes of negative externalities in banking,using yourcase studies to support your answer.(Select three new banking regulations introduced by Basel III and evaluate their effectiveness in counteracting these negative externalities