Thus, on a very broad level, the difference between the two is that while regulation is applicable to the system as a whole, supervision is entity-specific, with the intensity of supervision being proportional to the perceived risk levels. By making this point, I am trying to underline that supervision is more contextual rather than being generic.
Here, I would like to emphasize that it is essential to have clarity on the demarcation of the roles and remits of regulation and supervision. In the absence of this, both regulation and supervision are likely to get diluted and weakened, which would have an adverse impact on the strength and resilience of the financial sector.