In some countries, bank supervisors have an explicit responsibility to ensure that banks adhere to existing laws and maintain and implement appropriate consumer protection policies. For example, in the United States the federal banking agencies play an important role in fostering not just a safe and sound banking system, but also one that is diverse and fair in meeting the needs of consumers.
Good banking supervision is vital to the health of banks, particularly when the banking system has some type of government support – for example, either explicit or implicit deposit insurance. But ensuring a safe and sound banking system that is also competitive and profitable has its challenges.