Principles 14-29 cover supervisory expectations for banks, emphasising the importance of good corporate governance and risk management, as well as compliance with various supervisory standards. Prudential regulations and requirements for banks (CPs 14-29) Meanwhile, CPs 8-13 address various aspects of on- and off-site supervision. Within this group, CPs 1-7 deal with the legal and regulatory powers and institutional setup needed to properly licence, oversee and intervene against banks. Principles 1-13 focus on what supervisors themselves do, covering their powers, responsibilities and functions. Powers, responsibilities and functions of supervisors (CPs 1-13) While these preconditions are generally outside the control of supervisory authorities, supervisors should work with the government and applicable organisations to address any identified concerns. The CPs identify six preconditions that can have a bearing on the conduct of supervision. Preconditions for effective banking supervision This Executive Summary outlines the preconditions needed for effective supervision and the 29 CPs that are deemed essential to support a sound supervisory system. They are also used by the International Monetary Fund and the World Bank to evaluate the effectiveness of countries' systems of banking supervision as part of their Financial Sector Assessment Program. Prudential authorities use the CPs as a benchmark to assess the quality of their regulatory and supervisory frameworks and to help inform future work priorities. All are universally applicable, partly because the CPs embed the concept of proportionality, thus accommodating a range of banking systems and a broad spectrum of banks (from large internationally active banks to small, deposit-taking institutions). Initially published in 1997, and updated in 20, they contain 29 principles.

The Core principles for effective banking supervision (CPs) are the minimum global standards for the sound prudential regulation and supervision of banks.

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