It is not easy to specify the business areas that have a big comparative advantage since different financial institutions face different business environments and have different characteristics. In general, however, it is effective to explore the possibility of the added value by focusing on the nature of management resources.
Bank solvency indicators remain strong, as reflected by capitalization levels, the significant proportion of Tier-1 capital within net capital, and high ratios of loan-loss reserves to past-due loans.1 The strong position of the banking system has been the result of improvements to the regulatory and supervisory framework, including stricter capital requirements and rules for provisioning of reserves based on expected rather than realized losses.