It is cliche to note that financial sector development is a key ingredient for overall economic development and growth. However, there has been a long-standing debate on how critical it is for growth. Regardless, a well-designed, optimal, and effectively functioning financial sector regulatory and supervisory framework is important. Here again, what is the ‘optimal’ regulatory framework has always been under scrutiny, including most recently in the aftermath of the global financial crisis. Part V looks at various sub-sectors of the financial sector in the context of its broader development, as well as sector-related challenges in the Asia and Pacific region. This background note summarizes the key issues relating to financial supervision, with some discussion on regulation. Table V.1 presents a qualitative assessment of the basic features of financial sector development across the sub-regions of developing Asia. The first point to note is that the region is not homogeneous. As a result, there is a fair degree of variation in financial regulatory and supervisory approaches in comparison with global standards.