Instead, supervisors will be building upon the processes banks use to measure trading risks. This should substantially reduce regulatory burden and make standards more compatible with industry practice. In addition, the Basle Committee has agreed to common frameworks for gaining information on the derivatives activities of supervised institutions.
A major task before us is to work with emerging-market countries to strengthen and unify banking supervision. Greater consistency should reduce the risk of systemic problems arising from a financial disruption in any particular market. While most of these efforts have focused on market risk, I think it is fair to point out that the major exposure for most banks is credit risk.