while some other banks in the same jurisdiction, might adopt the standardised approach. since the irb approach is more risk sensitive vis - a - vis the standardised approach, a small change in the degree of risk could result in a large additional capital requirement for the banks following the irb approach - which would dissuade such banks from assuming high - risk exposures. from a systemic point of view, therefore, the banks adopting the standardised approach, and consequently, having a greater concentration of high - risk assets in their portfolio, could perhaps become vulnerable in times of economic downturns. these issues would need to be appropriately taken into account while deciding on the implementation of the basel ii. implementation challenges in developing countries even though it has been mentioned in several places that over 100 countries had implemented basel i, the assessments done in 71 countries as a part of financial sector assessment program ( fsap ) have revealed many deficiencies in the areas of risk management, consolidated supervision and corrective action for undercapitalised institutions, which are considered to be crucial to sound supervision and proper basel ii implementation. while a supervisory system which is fully or largely compliant with basel core principle 6, which incorporates basel i as the capital adequacy standard, is considered necessary for moving to basel ii, the assessments reveal that about 37 % of these countries had not complied with this core principle. the remaining countries were at various stages of compliance. given this level of compliance, the challenges that are likely to be faced by the developing economies in implementing the basel ii framework, will be daunting. as acknowledged by the imf, they do not have adequate internal expertise to assess and assist basel ii implementation in various jurisdictions. given the complexities of financial regulation and the added complexities of the basel ii framework, which will have to be specifically tailored to suit the domestic economies and the domestic banking systems, the regulators are right in insisting on the freedom and flexibility for adopting and implementing an appropriate roadmap without being constrained by any external pressures, direct or indirect. the ideal solution for managing a complex task of this nature is through mutual cooperation and assistance amongst the central banks. dangers of asymmetry in financial intermediation a likely scenario, which might arise post - basel ii implementation, is the asymmetry in regulatory regime amongst the competing broad segments of the financial sector viz., banking, securities and insurance sectors. while the commercial banking sector is expected to migrate to the basel ii regimen

their local currency and the us dollar. the six - monthly surveys of the oesterreichische nationalbank in eastern and south - eastern europe show that confidence in the euro in the eastern eu countries fell steadily between 2007 and 2011. this loss of confidence is also seen in southeast europe, although it is less pronounced. since 2012, confidence has grown again ; only in the czech republic was the view still held last year that the euro is probably not stable or trustworthy in the medium term. when one compares confidence in the euro with confidence in the domestic currency, the euro enjoys, in almost all cases, and even during the debt crises in greece and cyprus, more trust than the respective national currency. the euro is trusted internationally not only because of its stable value. users of euro banknotes and coins appreciate the very low counterfeit rate. while the number of genuine bis central bankers ’ speeches euro banknotes in circulation has almost doubled since the introduction of the single currency, the quantity of counterfeit notes has remained largely unchanged. after an initial period of about one - and - a - half years, the number of counterfeits detected in payment transactions had stabilised at around 50, 000 – 60, 000 pieces per month and with some variations the value has been very constant at this level for a good ten years. annual losses have been stable for years at €30 – €40 million. the “ banknote recirculation framework ” ensures that no counterfeit notes can enter circulation via automated teller machines ( atms ). all banks and cash - in - transit companies are required, according to an ecb decision, to reliably authenticate notes received from customers. only then are they suitable for stocking atms. the most often counterfeited denominations are the €20 and €50, which together account for around 80 % of all fakes. in relation to the total volume the proportion of counterfeit euro banknotes thus remains within very moderate limits and is in no way worrying. to maintain that situation, the first series of euro banknotes is gradually being replaced by new notes with improved, up - to - date security features. to ensure broad acceptance of the new notes, various stakeholders were involved during the design phase. focus group interviews and consultations involving associations of blind and visually impaired people influenced the design and characteristics of the security features. the new series is based on the concept of “ evolution not revolution ”. this means that banknote equipment should be able to