ISSUANCE BY THE BASEL COMMITTEE OF GUIDANCE ON MANAGING RISK IN BANKING.

The Basel Committee on Banking Supervision has issued three papers providing guidance on managing risk in banking. The papers are part of the committee's ongoing effort to strengthen procedures for risk management in banks. They can be obtained from the web site of the Bank for International Settlements (BIS): www.bis.org.

Principles for the Management of Credit Risk encourages banking supervisors globally to promote sound practices for managing credit risk. It identifies sound practices that banks should use in managing the credit risk of all of their activities, both banking and trading.

Best Practices for Credit Risk Disclosure identifies the credit risk information that market participants and supervisors need to meaningfully assess banking organizations. It encourages banks in all countries to provide that information to the public.

Supervisory Guidance for Managing Settlement Risk in Foreign Exchange Transactions stresses that banks should manage foreign exchange settlement risk, like other credit risks of a similar size and duration, through a formal process of measurement and control with active oversight by senior management. This paper builds on the previous work of the BIS Committee on Payment and Settlement Systems; all three papers are revisions of consultative papers issued in July 1999.

The Basel Committee was established in 1975 by the central banks of the Group of Ten countries and operates under the auspices of the BIS in Basel, Switzerland. The committee consists of senior supervisors of the world's largest banking systems and works to strengthen supervisory and regulatory practices worldwide.