There is sometimes a tendency by the authorities to try to solve all problems by more regulation. It is  BIS Review 104/2006  5  true that we could regulate away all the risks in the banking sector – but such regulation would hamper economic development. There must be a balance. Thus for each regulation we introduce we must also conduct a fair analysis of its costs, also non-financial, as well as its benefits, also non-financial. I agree that this is not easy, partly since in most cases you will not find any clearly measurable indicators, but the process of conducting the cost/benefit analysis will in itself help you in your decision. Supervision Good regulation is closely linked to good supervision. Supervisors must be able to build their work on a broad and relevant regulatory framework. Supervisors must also possess the necessary powers and other prerequisites to conduct efficient work. There are at least four important aspects: First, the supervisory authority must have operational independence from industry as well as from politicians. These must not interfere in the operational decisions of the supervisors, e.g. to take remedial measures or to close banks. Such decisions must be taken on purely prudential grounds. Of course, the supervisors are still responsible for their actions and could be criticized afterwards, e.g. in Parliament hearings, but they must be able to perform their operational duties independently. Also the bank, its owners and management should be able to sue the supervisors for malpractice and they may receive compensatory payments.
But, it should be stressed that throughout survey vintages, a rebalancing of the 4  CESEE Bank Lending Survey, European Investment Bank. sources of financing was visible. Given the deleveraging of the international banks present in the region, the intra-group financing which was receding was substituted with local funding. Easy access to retail and corporate deposits was reported as a feature in the second half of 2015, and the first half of 2016 as well. Chart 4: Average annual credit growth Annual credit growth in %  70  average 2005-2008  60  average 2009-2012  average 2013-2016  50 40 30 20  10 0 -10  SLO  SRB  ROM  POL  MKD  LIT  LAT  HUN  EST  CZR  CRO  BUL  BIH  ALB  -20  Source: Central Banks’ internet pages. In light of the rising importance of local funding as a source of financing for the banking systems in the region, and hence as a basis for further credit revival, one important aspect is the impact of low interest rates on the savings in the banking system. The dynamic observance of the deposits rates in the banking system of the region reveals a large downward adjustment of the yield on deposits, both for corporates and for households.