Risk-oriented banking supervision: approaches to the assessment of general systemic risks

Abstract

The last change introduced by the Basel Committee into the Basic principles of banking supervision is their focusing on the assessment and management of banking risks. As we see, banks are at the center of attention of the banking supervision in accordance with the recommendations of the Basel II. However, in our opinion, for the smooth functioning of the economic system more profound problems have to be solved, with the possibilities of banks' bankruptcies and general systemic risks to be addressed. The goal of the article is the development of a conception for the assessment of general economic risks of the banking system as part of a risk-focused banking supervision.