I do not have time to do more than quickly mention some of the important efforts that the Federal Reserve is pursuing in order to improve bank supervision. Much of our effort, along with that of other bank supervisors, is focused on improving our ability to monitor and supervise the risk management practices of banks and banking organizations.
Closely related work is aimed at devising capital standards that more accurately reflect the realities of today’s banking world. Through it all, I would emphasize that old-fashioned supervision, the core of which is the on-site examination, remains central to our supervisory strategy. Improved market discipline, increased communication with other supervisors, and enhanced stability through greater diversification are necessary.