ABSTRACT
Introduction The huge fiscal cost of recent bank crises, ansmg when governments step in to cover some or all of the losses of depositors has underlined the importance of improved mechanisms for reducing the scale and frequency of bank failures. These losses have been disproportionately high in developing countries, for a number of reasons including higher exogenous volatility, and a greater degree of government intervention in banking. But, despite the fact that costs have also been high there, application of industrial-country prudential standards is generally - and rightly - felt to be a pre-requisite for improvements in the functioning of developing-country systems. In this paper we review these standards and their application in developing countries, and we ask: 'Are they enough?'
