Is Supervision Keeping Pace with Innovation?*

In this paper, the author argues that financial supervision is keeping up with the pace of innovation in the industry by virtue of what he calls a “virtuous circle”: the supervisory framework is aligning itself more and more with the best risk management practices, while at the same time encouraging further advances in those practices. In the long run, financial stability would benefit businesses, consumers and financial institutions. The Geneva Papers (2005) 30, 11–18. doi:10.1057/palgrave.gpp.2510022