Conclusion The rapid changes in banking and financial services markets are creating opportunities and challenges. Increased competition in the financial services industry and increased synergies provided by financial services firms promise important benefits to consumers. But the increased size, breadth, complexity, and geographic scope of banking have increased the challenge of managing and of regulating and supervising banks.
Banks have responded by developing new approaches to measuring and managing risk. Now it is time for regulatory standards and supervisory practice to catch up. This catching up must involve updating the legislative framework underlying banking. It must also involve updating the international capital standards that have been the foundation of the regulatory framework.