An important institutional factor for monetary and financial stability worldwide is central bank independence, combined with full accountability vis-à-vis the people and their elected representatives. Currently, central bank independence is being challenged in a number of large advanced and emerging market economies.
Briefly, the Basel Committee on Banking Supervision (“the Committee”) issued a Revised Capital Adequacy framework which is widely called Basel II in June 2004. This framework has been endorsed by the Central Bank Governors and Heads of Banking Supervision of the G-10 countries.