This owes in large part to efforts to enhance financial intermediation and improve risk management by banks. We also continue to improve upon the core aspects of banking operations and enhance the regulatory framework for the effective conduct of banking supervision. Specifically, our focus is on realigning local regulations with international standards, particularly those pertaining to corporate governance, financial reporting and capital adequacy.
We are gearing up for Basel II, which calls for the adoption of risk-based capital for banks. As a first step towards Basel II, higher risk-weightings on NPLs have been introduced. The upshot of this is that banks are now compelled to adopt more formal procedures for quantifying risk and collecting  BIS Review 5/2007  1  information.