Supervisors, through the examination process, are, to be sure, still able to evaluate the true risk position of the bank, but the capital ratios of the larger banks are becoming less and less meaningful, a trend that will only accelerate.
For example, maximum intraday credit extended to NISS participant was about 14 percent of the settlement value in June 2003; this ratio has come down to about 6 percent in April this year. These reforms were mainly meant to improve the ability of the central bank to manage the liquidity of the monetary system and to manage risk exposures.