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Committees at the Bank for International Settlement (BIS)

Core Principles for Effective Banking Supervision

Basle Committee on Banking Supervision
Basle September 1997

Table of Contents

The twenty-five Principles
Section IIntroduction
Section IIPreconditions for Effective Banking Supervision
Section IIILicensing Process and Approval for Changes in Structure
A. Ownership structure
B. Operating plan, systems of control and internal organisation
C. Fit and proper test for directors and senior managers
D. Financial projections including capital
E. Prior approval from the home country supervisor when the proposed owner is a foreign bank
F. Transfer of a bank's shares
G. Major acquisitions or investments by a bank
Section IVArrangements for Ongoing Banking Supervision
A. Risks in Banking
B. Development and Implementation of Prudential Rules and Requirements
1. Capital adequacy
2. Credit risk management
3. Market risk management
4. Other risk management
5. Internal controls
C. Methods of Ongoing Banking Supervision
1. Off-site surveillance
2. On-site examination and/or use of external auditors
3. Supervision on a consolidated basis
D. Information Requirements of Banking Organisations
1. Accounting standards
2. Scope and frequency of reporting
3. Confirmation of the accuracy of information submitted
4. Confidentiality of supervisory information
5. Disclosure
Section VFormal Powers of Supervisors
A. Corrective Measures
B. Liquidation Procedures
Section VICross-border Banking
A. Obligations of Home Country Supervisors
B. Obligations of Host Country Supervisors
Appendix I Special Issues Related to Government-owned Banks
Appendix IIDeposit Protection


See also: List of Core Principles for Effective Banking Supervision

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