Considering the speed with which banking is changing, it is recognised that there is a need to enlarge the focus and thrust of Risk-Based Supervision (RBS) so as to be able to improve the risk sensitivity of the supervisory approach.
Oudiz and Sachs (1984) reinforced the case against coordination by simulating their state-of-the-art general equilibrium model and showing that, even if one picked the right model, the improvement, relative to proceeding independently, was very modest.5 It is important to note that all of these cautions came from the economics side.