Our benchmarking work has, for the first time, given supervisors meaningful information on international benchmarks against which they can compare their domestic banks. Many supervisors are responsible for only a handful of IRB banks, and it can be difficult to generate reliable benchmarks from a small sample. But our studies have provided supervisors with a much clearer picture of how their banks stack up against their international peers, and supervisory action is already being taken against a number of the outlier banks that are on the low side.   Similarly, the Committee’s RCAP jurisdictional assessments are having an impact by reducing variability due to undesirable differences in national regulations. These may often seem to be small issues of technical detail, but they can have a material impact on capital outcomes. To the extent these differences are removed, they can add to the consistency of outcomes. The Committee is also looking at the issue of national discretions and Pillar 2, and it is investigating whether more can be done to reduce variability from these sources by elinimating discretion where possible, and strengthening supervisory guidance on model validation, review and approval.   Since transparency (or lack thereof) of bank modelling practices is at the heart of the problem, during 2014 the Committee plans to propose enhancements to Pillar 3. The aim is to provide banks’ external stakeholders with information to better understand banks’ risk profiles and risk-weighted asset differences.
It is rather a matter of a new challenge in the long series of challenges the Swedish economy has had to face ever since the dawn of the industrial era more than a century ago. 5  BIS Review 118/1999