In addition to the work on capital standards, particular supervisory questions which the Committee has addressed include the supervision of bank’s foreign exchange positions, the management of banks international lending (i.e. country risk ), the management of bank’s off-balance –sheet exposures, the prevention of criminal use of the banking system, the supervision of large exposures, risk management guidelines for derivatives and the management of interest rate risk .
Banks face three major types of risks: Credit Risk, Market Risk, and Operational Risk. Banks are in the business of accepting deposits and lending: they operate mainly with depositors’ funds. Unfortunately, not all the monies lent, and the interest due thereon is recovered.