Supervisory Standards and Guidelines are set by supervisors with a view to ensuring effective supervision. Similarly, the committee of banking supervisory authorities develops supervisory standards and guidelines with the hope that member countries will adapt them with a view to encouraging convergence towards common approaches and standards.
This supervisory approach focuses on individual group entities. Individual entities are supervised on a solo basis according to the capital requirements of their respective regulators. The Transaction’s Based Type of Supervision of individual entities is complemented by a general qualitative assessment of the group as a whole and, usually, by a quantitative group-wide assessment of the adequacy of capital.