The modernization of bank supervision

This article analyses the main challenges involved in modernizing bank supervision in the light of recent banking crises and the changes currently taking place in the financial system at the international level. Within a highly dynamic environment -rapid technological development in the field of informatics, stiff competition within the capital market as a result of liberalization, the increasingly prominent roles being assumed by financial conglomerates in an effort to achieve economies of scope, and the high degree of volatility of the main economic variables, which sharply increases the level of financial risk- the supervision of the banking system needs to be flexible in order to permit financial institutions to take advantage of opportunities for increasing their profitability and efficiency.