Relationship with banks

It is impossible for regulators to do their job without close and continuous contact with the regulated entities, both to obtain basic information and to assess the effects of regulation, both current and prospective, on those being regulated. There is, no doubt, a fine line to be drawn between trying to regulate in an informational vacuum and the regulators ending up in the pockets of the regulated (capture).

But the BCBS itself was, for the most part, freed from having to find this balance, since virtually all direct contact between banks and their supervisors/regulators came via the constituent national supervisors/regulators. As repeatedly noted in earlier chapters, the main source of information and evidence for the BCBS came in the guise of questionnaires constructed by the Secretariat. These would normally be handed over to the BCBS members, who would be responsible for passing them on to an appropriate sample of their own commercial banks, coordinating these responses (so that individual bank confidentiality was maintained) and passing the results back to the BCBS Secretariat, who would then summarise the overall findings.