Focus on risks and tailoring our supervisory stance based on the specific risks in a financial institution would be the cornerstone of the new approach towards banking supervision. In this milieu, there is a need for an enhanced understanding of the major risk categories individually as well from a collective perspective in terms of the interactions among the major risks.
2) It has now come to be accepted that the inter-connected world has ensured that the uncertainties in the advanced economies find their way to developing nations through various channels like the trade, finance, commodity price and confidence channels.