Introduction

With the advent of Basel 2 the supervision and regulation of banks has probably reached a high water mark. Yet such detailed supervision is a new phenomenon in many countries. Even 30 years ago the controls would have been at arms length. The reform of the system has, to a large extent, been the response to unfortunate experience. While full-blown financial crises have fortunately struck only a few of the main countries all have experienced strains from time to time.