In the area of banking supervision, our focus will be on reducing the stock of non-performing loans with the help of congress in extending the SPV Law; enhancing the prudential regulatory  2  BIS Review 3/2006  environment of the banking system to align it with international standards and best practices; strengthening corporate governance standards and market discipline mechanisms; developing the domestic capital market further; enhancing the payments system; and improving the BSP’s supervision technology and capacity .
In the pipeline are the issuances of the guidelines on the implementation of Basel II Accord, and the new financial reporting package in line with the adoption of international accounting standards. While there will be initial friction costs related to the transition, these will strengthen the banking system for the long haul .