Report on the impact and accountability of banking supervision.
The Report on impact and accountability of banking supervisionpresents a range-of-practice study on how supervisors around the world define and evaluate the impact of their policies and actions, manage against that impact and then account for it to their external stakeholders.
In response to the global financial crisis, standard-setting bodies and national authorities initiated a broad overhaul of the regulatory framework. The implementation of Basel III makes a necessary and important contribution to strengthening regulation and increasing the resilience of banks. However, regulatory reforms alone cannot assure the soundness and stability of financial institutions; they must be supported by effective supervision.
In recent years, supervisors have revised and strengthened their strategy and practice. Supervision has become more comprehensive and intrusive, taking additional dimensions of a bank's business into account. Supervisors have also taken steps to gain more insight into the impact of their activities.
Measuring the impact of supervision is a relatively new area. Jurisdictions have nevertheless developed various practices to show how their activities contribute to the soundness and stability of financial institutions and of the financial system. That said, no analysis is straightforward, because supervisors have to deal with methodological challenges and because there is no unique method or indicator that can be singled out in response to these challenges. Thus, current experience must be discussed while practices are still evolving.
Finally, the report shows how a well designed system of accountability can support operational independence and enhance transparency, while safeguarding confidential, institution-specific information.
- Publication Date: July 2015
- Publication Type: Sound Practices
- Publication Status: Current
- Publication Category: Uncategorized
- Number of Pages: 44
- Keywords: Government Parliament Objectives, Regulatory Framework, Risk Measures, Efficiency, Financial Crisis, Effectiveness
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