These "prompt corrective action" provisions play a significant role in maintaining the strong capital position of U.S. banks, above and beyond the Basel minimums. Third, as this audience well knows, the United States for some time has had an effective Pillar II, or procedure for supervisory review and guidance.
That supervisors evaluate and review banks' operations and policies and discuss their views and suggestions with bank managers has been part of our institutional framework. In certain cases, supervisors may encourage institutions to hold additional capital for risks, such as concentrations, that the Basel I rules do not capture directly. For the United States banking authorities, Pillar II of Basel II requires nothing new.