Moreover, as many of you here would know too well, it is not enough to just focus our attention on the implications of our policies for banks as the traditional lines between the various financial sectors become less clear. It is therefore important to understand the implications of market developments and supervisory changes on non-bank financial institutions and financial markets more generally.
Supervision is not all about sophisticated modelling approaches. Rather it is about understanding the risks that a bank faces and promoting better management of those risks. Used appropriately, advanced modelling approaches can help a bank to refine and sharpen its ability to measure, monitor and control risk.