Typically, cross-country comparisons are often fraught with difficulties, not only because of the different regulatory and economic regimes encountered by financial entities, but also owing to the differential quality of services associated with deposits and loans in different countries. Maudos and Pastor (2001) analysed the cost and profit efficiency across 14 EU economies, as well as Japan and the USA.
First and foremost, the BCBS should monitor how the new Basel rules are implemented in national laws and ensure it has a thorough overview of how these are then translated into supervisory practices. It should also foster an intensive exchange of information about the risks and vulnerabilities we see in today’s and, in particular, tomorrow’s macroeconomic environment.