aejae.blogg.se - Raihan zamil

#RAIHAN ZAMIL LICENSE#

Regardless, the lack of international focus on the practice of supervision has unintended consequences.Īn example is the formulation and implementation of the Basel II capital accord, whose stated objective is to strengthen financial stability through enhanced capital requirements, better supervision, and robust market discipline. Second, it is a far more complex “fix” than strengthening regulations.

First, its application is local and context driven. Supervision traditionally has taken a back seat to regulation within the international reform agenda for two main reasons. Based on their risk assessments, supervisors are also responsible for taking timely actions against problem banks or problems in banks. Supervisors carry out these tasks by evaluating banks’ corporate governance, internal controls, and risk management practices their financial capacity and their compliance with various laws and regulations. Supervision is the authorities’ means of implementing these rules through ongoing off-site surveillance and periodic on-site examinations of individual banks.The main intent is to require bank management to behave prudently because banks are the guardians of depositor funds.

#RAIHAN ZAMIL LICENSE#

Laws and regulations are the collective set of rules that provide the banking authority with powers to license banks, set minimum operating and risk management standards for banks, and take necessary corrective measures-including revocation of banking licenses-in problem bank situations.

In practice, regulation and supervision serve two distinct but related functions: Regulation and supervision are often used interchangeably when describing the official sector’s role in the oversight of the banking system. Enhancements to macro-prudential supervision (which focuses on an assessment of common shocks affecting the broader financial system), although necessary, are beyond the scope of this article. Strengthening micro-prudential supervision should be at the forefront of the global reform agenda and is the linchpin in fostering financial system stability. For this reason, the proposed regulatory reforms are akin to “trying to prevent another outbreak of H1N1 through high level epidemiological planning, without involving the doctors and health workers on the ground” (Palmer, 2009).

The business of banking supervision-and the risk management practices of banks-remains inherently subjective, regardless of the imposition of new, or tightening of existing, rules. Still, changing rules alone is insufficient to foster financial stability if the quality of their application-that is, supervision-is not effective. These enhancements, particularly higher capital and liquidity buffers, should make the global financial system better able to absorb and provide more tangible backstops to curb excessive risk-taking at banks.

Nearly all of the proposed reforms focus on strengthening bank-centered regulations, such as capital, liquidity, loan loss provisioning, or compensation arrangements. IN the wake of the global financial crisis, there have been numerous proposals to reform the oversight of the global financial system-from the Group of 20 advanced and emerging economies (G-20) and international standards setters.

The judgment of banking supervisors is crucial 3Ĭhanging the rules alone cannot make the financial system safe. Finance & Development, September 2010, Vol.