In essence, a decentralized approach to  BIS Review 50/1997  -4-  regulation followed from the decentralized financial decisionmaking process of its day. To borrow a concept from architecture: form followed function. In today’s world, however, the “form”, decentralized regulation, no longer follows the “function”, centralized risk management.
Loan quality has remained stable up to now. The ratio of non-performing loans to balance sheet assets for the groups as a whole remains close to 5 per cent; for bad debts alone, the ratio is close to 3 per cent. More than 60 per cent of the nominal value of bad debts is covered by write-downs.