The Basel Core Principles have been used by countries as a benchmark for assessing the quality of their supervisory systems and for identifying future work needed to ensure sound supervisory practices. They have also been used by the International Monetary Fund (IMF) and the World Bank in the context of the Financial Sector Assessment Program.

"Since 1997, the Basel Core Principles have made significant contributions to the enhancement of supervisory practices around the world, and we are keen to preserve their effectiveness and promote continuity by only making changes that are necessary" explained Mr Jaime Caruana, Chairman of the Basel Committee and Governor of the Bank of Spain.

"The documents we are publishing today are the result of a common endeavour between the BCBS and our supervisory colleagues from around the world, as well as the IMF and the World Bank. This initiative serves as an example of how engagement across a wide range of countries can really enhance the efficiency of our work and the quality of the outcome," he added.

Mr Göran Lind, member of the Basel Committee and leader of the review project, noted that "The Core Principles are intended to be useful for all countries and for different financial systems and to reflect diverse systems, structures and experiences. We look forward to receiving further feedback from this next round of consultation."

Comments on the revised Basel Core Principles and Methodology documents are invited by 23 June 2006.

The BIS says that changes to the Basel Core Principles have been kept to a minimum to ensure their continued relevance and flexibility. The updated Principles remain focused on banking supervision.

"As a result of the review, the Basel Core Principles have become more flexible to ensure efficient supervision of both advanced and less advanced banking systems. In addition, cross-border and cross-sectoral trends and developments are reflected more comprehensively, as is the need for closer cooperation and information exchange between supervisors of different sectors and countries," a BIS statement explained.

A new "umbrella" principle recommending that banks have integrated risk management systems has been added, covering all common aspects across different risk types. In addition, the criteria for assessing interest rate, liquidity and operational risks have been enhanced, reflecting the increasing focus on these risks. The criteria dealing with the fight against money laundering and terrorist financing as well as fraud prevention have also been expanded.

To attain a higher degree of consistency between the Basel Core Principles and other related international standards, the Committee has collaborated with the International Association of Insurance Supervisors, the International Organization of Securities Commissions, the Financial Action Task Force and the Committee on Payment and Settlement Systems.