BIS Review 108/1997  banks’ shareholders and management that have the strongest interest to measure risk accurately.” Andrew Crockett, September 1997.3 To illustrate the evolution that is taking place in supervision, let me cite one example.
In a recent initiative by the Basle Committee on Banking Supervision to amend the Capital Accord to include market risk, a greater role has been given to banks’ own internal models in the measurement of market risk. This reflects a move away from regulation that relies on detailed rules to an approach that places more emphasis on the adequacy of internal risk control mechanisms.