SUPERVISION OF BANKS AND THE STABILITY OF THE BANKING SYSTEM

Banking is an activity that influences, both direct ly and indirectly, all the other activities and the economy as a whole. What is more, banking is the ac tivity that takes over the risks immanent in the nature if financial institutions. Nowadays banking is going through significant changes of functions and forms. The creation of gigantic banks through c onsolidations and acquisitions, a growing competition of non banking financial and service fi rms, the internationalization of financial markets, the multiplications of services, changes in rules a nd deregulations, continuous innovations in the information technology and automatization are chang es caused by the growing trend of globalization. Banking requires human and technical skills for the understanding of risk features in the bank’s environment, the identification and classification f risks, their measurement, the control and settin g up of procedures and instruments needed to minimize the exposure to risks in order to minimize the losses. In order to have a continuous realization o f that goal a growing international cooperation is inevitable in banking, in both the regulation and t he supervision of banks, starting from the conditio ns needed to found and operate banks to the moment the bank ceases to operate.