I must stress, however, that the most important efforts to implement the Core Principles continues to be the job of the individual countries. Without the support and backing of national authorities to follow through with the implementation of these principles, our broader efforts simply cannot be effective. In this connection, the Basel Committee has long recognized the need for effective training and seminars for participants in the global bank supervision community. Over the years it has sponsored numerous programs which have been beneficial in allowing supervisors from different countries to share experiences and exchange ideas for improved practices. Building on its longstanding commitment to these outreach efforts, the Basel Committee, together with the Bank for International Settlements, jointly established the Financial Stability Institute in 1998. The Institute currently conducts leadership training targeted to supervisors in emerging market countries, facilitates technical assistance in individual countries, and provides training on a regional basis. The Basel Committee also plays a key role in the Financial Stability Forum that was established by the G7 Finance Ministers and Governors in early 1999. Through the Forum, the Basel Committee is able to share its experience in implementing the Core Principles with other organizations that have embarked on similar initiatives, such as IOSCO, the International Organization of Securities Commissions. More broadly, the Financial Stability Forum is coordinating an effort to improve awareness of and accessibility to training for regulators and supervisors worldwide.

Of course, to add value over and above the minimum capital standards, improved disclosure must go beyond the simple reporting of minimum capital ratios. When banks disclose timely and accurate information about their capital structure and risk exposures, market participants can better evaluate risks and act accordingly. The disclosure of timely and accurate information, in turn, is an incentive for banks to ensure that the market perceives them not only as effectively managing their risks, but also as being adequately capitalized. Market reactions to the public disclosures of banks can also play an important signaling role for supervisors in assessing the adequacy of a bank’s capital. A further reason to encourage disclosure beyond the reporting of regulatory capital ratios is that these ratios have become the primary focal point for investors and industry analysts. The result has been that bank managements have had an incentive to focus solely on improvements in these ratios, even when the ratios are not fully reflective of risks. More comprehensive disclosure could lessen this incentive. With these considerations in mind, the Basel Committee is seeking to design an expanded set of disclosure guidelines, taking into account the proprietary information needs of banks. I believe that fuller disclosure for all banks can take us a long way towards effective market discipline. We also encourage banks to include in their fuller disclosures information specific to their risk profile. The timeliness and the quality of disclosure are important. The frequency of disclosure should reflect the nature of the risks involved.