This work charts the consequences for banking supervision of two stylized developments that over the1990s have characterized the global financial landscape: the integration of cross-sector and cross-border financial services. Both developments inevitably call for a supervisory response and the authors discuss what form and direction this should take. They also address a number of other important subjects including the new Capital Accord (Basel II), the convergence of supervisory practices, procyclicality, financial conglomerates, deposit indurance and a brief history of the interplay between banking supervision and bank behaviour. The important practical and theoretical issues highlighted in this volume clearly demonstrate that banking supervision currently stands at a crossroads. The detailed, objective discussions of these themes and the conclusions drawn should help policymakers to decide which path to take. The contributions from high-level practitioners and academics from around the world should be of interest to commercial bankers, and academics and researchers of banking, finance and monetary economics. INDICE Introduction: banking supervision at the crossroads - background and overview, Klaas Knot a brief history of the institutional design of banking supervision in the Netherlands, Joke Mooij and Henriette Prast. Part 1 Convergence of supervisory practices: opening remarks, Nout Wellink a functional approach to fifty years of banking supervision, Kees van Dijkhuizen the new single regulator in Germany, Jochen Sanio the role of the Eurosystem in prudential supervision, Wim Duisenberg convergence in supervision, a commercial banker's perspective, Tom de Swaan. Part 2 Issues on the theory of banking supervision: the optimum regulatory environment, David Llewellyn the effectiveness of deposit insurance, Gillian Garcia credit risk measurement and procyclicality, Philip Lowe economic versus regulatory capital for financial conglomerates, Jaap Bikker and Iman van