Toward a more competitive, efficient, and innovative financial system The United States has a financial system that is remarkably multifaceted and diverse. Some countries rely heavily on a few large banks to provide credit and financial services; our system, in contrast, includes financial institutions of all sizes, with a wide range of charters and missions.
As I have stated earlier, Basel II strengthens the link between regulatory capital and risk management as it will help us ensure that banks will maintain capital appropriate to their risk-taking activities. Banks are also expected to properly assess and manage the risks. Moreover, banks would be required to disclose pertinent information necessary to enable market mechanisms to complement the BSP’s supervisory oversight function.