The Basle core principles have also identified a number of challenging areas for regulators and supervisors, which must be satisfied to ensure orderly conduct of financial system and to promote its soundness and stability. Transparency in banking operation is also something which has to receive top priority given the current nature of capital markets.
Transparency and accountability demand realistic valuation of assets, public disclosure norms and prudential reporting by banks to help depositors and investors form an informed opinion about the state of the financial system, thereby enabling them to react in an orderly fashion to asset price changes.