Developments
in Banking Supervision
|
Paula Cristina Seixas de Oliveira
Liquidity & Market Risks Monitoring Division Off-Site
Supervision Department, Banco Central do Brasil. |
Risk Monitoring on Banking Supervision
The Basel Committee for Banking Supervision
(BCBS) is a forum for the discussion of banking supervision and regulatory
matters. One of its main functions is to facilitate the exchange of experiences
among national supervisory entities, in an effort to promote effective
supervisory practices across countries. In furtherance of this objective, the
BCBS publishes documents related to the core principles of and minimum standards
for banking supervision and regulation. The degree of compliance with the BCBS’s
recommended minimum standards for bank supervision varies across countries and
is dependent on the complexity of a country’s financial markets, and on the
power and effectiveness of its banking supervisory and regulatory and
authorities.
Corporate Governance in Banks in the
Caribbean
XXII Annual Conference of the Caribbean Group of
Banking Supervisors.
Banking provides the majority of financing
on both a corporate and individual basis in small open economies like those in
the Caribbean archipelago and hence it is a central component of the financial
system. As a result of banks’ contribution to the financial stability of the
region it is paramount that they are directly monitored and regulated by the
appropriate authorities. While most literature on corporate governance focuses
on corporate governance in the unregulated, non-financial sector and to a lesser
extent corporate governance in small open economies, the attached paper focuses
on sound corporate governance procedures in the banking sector in small open
economies. Although important advances in corporate governance have been made in
the Caribbean financial sector further discourse on corporate governance
practices is needed.
Compliance and the Compliance Function in
Banks
 As
part of its ongoing efforts to address bank supervisory issues and enhance sound
practices in banking organizations, the Basel Committee on Banking Supervision (the
Committee) is issuing this high level paper on compliance risk and the
compliance function in banks. Banking supervisors must be satisfied that
effective compliance policies and procedures are followed and that management
takes appropriate corrective action when compliance failures are identified.
Bank
Supervision and Sound Provisioning Practices
Pedro Pablo Villasante, General Director, Bank of Spain, Member of the Basel
Committee.
The sound practices of credit risk accounting provisioning”,
to which the Bank of Spain has paid very special attention for several decades
in its supervisory authority capacity of credit entities.
Top
Recommended Readings
Monetary Policy and Basel II
Jaime Caruana, Governor of the Bank of Spain
and Chairman of the Basel Committee
 Why
is it worth pondering on the links between monetary policy and Basel II? Let me
illustrate my own reflections on this point by drawing a simple analogy. In a
way, liquidity is for an advanced economy much like blood for a living being.
Financial market participants pay considerable attention to the monetary policy
decisions made by central banks, for these are, in a broad sense, the
“guardians” of liquidity.
The
divorce between macro financial stability and micro supervisory responsibility -
are we now in for a more stable life?
Eva Srejber, First Deputy Governor of the Sveriges Riksbank,
 Before
the banking crisis in the early 1990s, the cooperation between the Riksbank and
the Swedish FSA (then the Banking Inspection) was limited to high-level contacts.
In their day-to-day activities, however, the two authorities worked in different
silos – the Riksbank with monetary and exchange rate policy and the FSA with
regulating and supervising financial institutions. The crisis made it very clear
to the Swedish authorities that there is a strong link between soundness of
financial institutions and macro financial stability, and hence a need for close
cooperation between the FSA and the central bank.
Some thoughts on a new regulatory regime
for
credit unions
Ewart S Williams, Governor of the Central
Bank of Trinidad and Tobago
 I
would like to express my sincere thanks to the Board of the Eastern Credit Union
for inviting me to address you on the occasion of your Thirty First Annual
General Meeting. I am pleased that 2004 was a very successful year and that you
have very good news for your membership when you meet tomorrow notwithstanding
the low interest rate environment encouraged by Central Bank policy. I am
convinced that competition brings out the best in all of us and Eastern Credit
Union is an excellent example.
Regulatory relief
Mark W Olson, Member of the Board of Governors of the US
Federal Reserve System.
 In my
remarks, I will highlight the Board’s three highest priority proposals. These
three proposals would allow the Federal Reserve to pay interest on balances held
by depository institutions at Reserve Banks, provide the Board greater
flexibility in setting reserve requirements, and permit depository institutions
to pay interest on demand deposits. These amendments would improve efficiency in
the financial sector, assist small banks and small businesses, and enhance the
Federal Reserve’s toolkit for efficiently conducting monetary policy.
Latin America & Caribbean Banks
Gustavo Lopez, Senior Director, Fitch Ratings
 An
interesting presentation by Mr. Gustavo Lopez, Senior Director of FITCH Ratings
showing the main risk factors of Latin-American Banks in ASBA´s sub-regions,
from an external specialist perspective.
Top |
Canada
recognizes that upgrading the capacity of emerging/developing market regulatory
bodies contributes directly to global financial sector stability. Canada has
chosen to play a key role in this regard through the creation, in 2001, of a
technical assistance program. This technical assistance program was developed by
the Office of the Superintendent of Financial Institutions, Canada (OSFI), an
associate member of ASBA.
The AFP,
Insurance and Banking Superintendency (SBS), through its Note B-2147-2005,
published on June 17th, 2005, established the necessary conditions for financial
system entities to grant services through correspondent tellers at national
commercial establishments. This regulation will enable greater public access to
basic financial services, especially in geographic zones where banking
facilities are minimal or nonexistent. 
A year
has gone by since the release of the International Convergence of Capital
Measurement and Capital Standards: a Revised Framework, commonly known as Basel
II. Since its release, the new framework has been closely studied by many
non-G10 regulatory and supervisory agencies, in an effort to develop options for
adopting Basel II within an acceptable timeframe.