In a situation of financial stress, supervisory information remains essential is the central bank financial stability assessment is to be effective. However, the nature of each financial stress is likely to differ from the previous ones. Therefore, the information needs have to be identified on a case-by-case basis.
First, financial supervision has drawn widespread critique. The stereotype perception is that risk management and supervisory practices lagged behind financial innovations and emerging new business models. The present crisis underscores the need for regulation staying ahead of the curve, and for continually upgrading the skills and instruments for financial regulation and supervision. However, there is need for a note of caution here.