More importantly perhaps, the new accord’s call for more comprehensive qualitative supervision, rather than the mechanical checking of quantitative ratios, is likely to induce banks to focus on their risk management and monitoring capabilities, and thus on their ability to incorporate all information that is relevant to risk control.
There is little doubt in my mind that the encouragement of a credit culture which requires lending officers to realistically appraise the credit and market risks of their portfolio or investment decisions will generate many incentives to use and disclose market-relevant information.