I suspect that a new, and I think evolutionary, supervisory vehicle - one that supplements the evaluation of risk-management systems - will soon be a required part of supervision for all of us. I refer, of course, to the development, use, and application of internal credit-risk-rating systems by banks.
Systems for credit-risk rating in one form or another, are widely used by LCBOs for internal management purposes. As they improve, these systems can increasingly be expected to figure prominently in our supervisory process. That dual use - for both management and supervision - is a dramatic innovation, creating a link between bank management and supervisory standards that has been needed for some time.