A COMPARATIVE SUPERVISION OVERBANKING SYSTEM IN IRAN, AND SELECTED COUNTRIES

Banking operations indispensably involve risks. The risks to which banks ore exposed, take effect from nature of their activities, and specific characteristics of this financial structure. A vulnerable and unstable banking system can discriminate all macroeconomic output in. industrialized and developing countries, upset the transitory economics. Broad distribution and excessively high cost of banking system have caused rise to coordinated actions with the purpose of promotion of stability and confidence coefficient of banking system. This article is an effort for a survey of supervisory systems of banking system in England, Japan, Malaysia and India to be examined and afterword, the supervisory methods applied in those countries have been compared to those in Iran. The supervisory method utilized in a majority of advanced countries, is the risk based supervisory system. This is with the supervisory method system in Iran is a comparative type. The performed evaluation has indicated that the supervision method in ensuring financial health of banking used in our country is not sufficiently effective to provide financial soundness of banking system.The comparative supervision of the way applied in Iran has been implemented, by using bank health indicators. The result from the evaluation indicated, that the supervision method vas not effective enough to ensure financial health of banks in our country.