The return of banking profitability in 2001 signaled a turnaround of the crisis
and an opportunity to focus on developing a financial system. The new goal is to
provide the system with sufficient resiliency to withstand new competitive forces
brought about through trade liberalization and appropriation of traditional banking
services by non-bank entrants. The growing availability of new financial services and
technology that allows risk to be priced, diversified, and shared cross borders further
requires a modernization of both players and supervisors. Business wise, this meant
employing comprehensive risk management tools, IT systems and continuing efforts to
strengthen banking income through cost-cutting measures, improved credit
underwriting standards, and new income channels such as fee-based services and retail
banking. To assist these initiatives, integral commercial banking laws, regulations as
well as supervisory efforts are also being updated, thereby enhancing supervisory
flexibility and adaptability suitable for rapid financial innovation.