2  BIS Review 23/2008  •  Finally, banks will have to provide much better transparency to the market about the range of exposures they hold, including to securitisations and conduits. Taken together, these measures will introduce a more rigorous, forward looking perspective on the types of risks that banks could face in a downturn.
They will require banks to factor these risks into minimum regulatory capital, internal capital planning and disclosures to the market. Supervisors will reinforce these disciplines by assessing banks’ risk management, measurement and capital before capital ratios fall below the minimum requirements. This will help change incentives to anticipate risks and potential losses and to hold commensurate capital ex ante.