02.1 The Core Principles are conceived as a framework of minimum standards for sound supervisory practices. The Core Principles provide a comprehensive standard for establishing a sound foundation for the regulation, supervision, governance and risk management of the banking sector. They set out the powers that supervisors should have to address safety and soundness concerns, promote a forward-looking and risk-based approach to supervision, and encourage early intervention and timely supervisory actions to mitigate threats to the safety and soundness of banks and the banking system. [National authorities are free to implement any supplementary measures that may be needed to achieve effective supervision in their jurisdictions.]

02.2 The Core Principles are considered universally applicable, irrespective of the complexity of banks and banking systems, and should be applied by national authorities in the supervision of banking organisations within their jurisdictions. [In countries where non-bank financial institutions provide deposit and lending services similar to those of banks, many of the principles set out in this document would also be appropriate to apply to such non-bank financial institutions. Some of these institutions may be regulated differently from banks, as long as they do not collectively hold a significant proportion of the deposits in a financial system.] A high degree of compliance with the Core Principles should foster overall financial system stability; however, banking supervision cannot, and should not, provide an assurance that banks will not fail.

02.3 The Core Principles standard is structured as follows: