The activities of these organizations demand that we not only go beyond Basel I but that we continue to improve on today's most advanced methods of risk management. Thus, in the proposed new framework, known as Basel II, supervisors are seeking to draw upon industry best practice while also encouraging the industry to advance the risk-management frontier.
The evolution in risk-management practices Risk-management practices and bank supervision have both evolved over their long histories, but innovations in information technology and in financial markets have caused the pace of change to increase significantly over the past two decades. In particular, the management of market risk and credit risk has become increasingly sophisticated.