EIRP Proceedings, Vol 6 (2011)

Abstract

As well known, in the economic literature the concept of market failure illustrates among other things
necessity of a serious regulation framework. In this context, the failure of a bank institution is generally considered to
be of more importance than the failure of other types of business firms because of the interconnectedness between
banking institutions and its adjacent spill over of systemic risk in space and time. As a result, banking institutions are
typically subjected to rigorous regulation, and bank failures are one of the major public policy objectives. In the
financial area it is necessary an international regulation framework of banking convergence to approach the topics risk
management in terms of quantitative and qualitative indexes of banking institutions. In this respect , the BASEL II
mechanism represents the most referential framework of micro prudential banking supervision oriented mostly to
risk management of banking instruments and manager behavior in the context of stress test an specific banking
efficiency.For exemple, the rating system and the early stage.