Mr W P Cooke, Associate Director, speaking on some current supervisory concerns in international banking, discusses the problems of assessing capital adequacy in a world of rapid innovation brought about by deregulation. One consequence of deregulation is the growing complexity of financial services groups which raises new questions on the measurement and composition of capital. The appropriate level of capital needs to take into account risks resulting from business conducted off the balance sheet as well as the quality of assets on it. The role of bank auditors within the supervisory process and the impact of technological advances on the financial services industry are also issues to which further attention needs to be given.
Some current concerns of a banking supervisor - Remarks by Mr W P Cooke