Global banking regulators are proposing a new set of supervisory principles that will guide national authorities in overseeing their banks.

The Basel Committee on Banking Supervision has issued a set of revised principles for effective banking supervision, which address both supervisory powers, responsibilities and functions of regulators, along with the expectations of banks. The core principles, the number of which have increased from 25 to 29, represent the de facto framework of minimum standards for sound supervisory practices, it says.

The committee says that its existing principles are being enhanced, particularly in areas that are necessary to strengthen supervisory practices and risk management in response to vulnerabilities that were revealed in the last financial crisis.

The revisions also address several key trends and developments that emerged during the last few years of market turmoil: the need for greater oversight of systemically important banks; the importance of applying a macro perspective to bank supervision to deal with systemic risk; and an increasing focus on effective crisis management, recovery and resolution measures in reducing both the probability and impact of a bank failure.

Also, given the fundamental deficiencies in banks’ corporate governance that were exposed in the last crisis, a new principle on corporate governance has been added. Other revisions include new principles dedicated to greater public disclosure and transparency, and enhanced financial reporting and external audit.

The committee indicates that it believes that implementation of the revised principles by all countries “will be a significant step towards improving financial stability domestically and internationally, and provide a good basis for further development of effective supervisory systems.”

“With the advent of various policy measures for addressing both bank-specific and broader systemic risks, the key challenge in this revision of the core principles has been to uphold their relevance for different jurisdictions and banking systems,” said Teo Swee Lian, co-chair of the Core Principles Group and deputy managing director of the Monetary Authority of Singapore. “As highlighted in the paper, a proportionate approach achieves this through advocating risk-based supervision and supervisory expectations that are commensurate with a bank’s risk profile and systemic importance.”

Comments are due by March 20, 2012.