Links with the Basel Core Principle

The “efficient resolution of problems in banks” is mentioned in the Core Principles for Effective Banking Supervision (BCP) issued by the BCBS as one of the key precondi­tions for effective banking supervision. Other preconditions are jointly the sound and sustainable macroeconomic policies, a well-developed public infrastructure, an effective market discipline, and the mechanisms for providing appropriate systemic protection. In addition, earlier reviews of lessons from BCP assessments by World Bank and IMF staff members have recommended that, in view of their importance, adequate procedures for the resolution of problem banks should be made an integral part of the BCP assessments.2 In addition, compliance with BCP 22 on remedial measures depends critically on a strong framework for bank insolvency.3

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