Joint Forum of International Regulatory Organizations Issues Report on Supervisory Colleges for Financial Conglomerates
The Joint Forum of the Basel Committee on Banking Supervision, IOSCO and the International Association of Insurance Supervisors issued a publication titled: Report on Supervisory Colleges for Financial Conglomerates. The Report presents findings from a self-assessment survey (answered by regulators in 14 jurisdictions, including the United States) on how cross-sectoral issues related to financial conglomerates are addressed within supervisory colleges.
The Joint Forum found that most jurisdictions have a set of principles in place for financial conglomerate supervision which includes supplementary supervision, intra-group transactions, concentration, risk management and governance monitoring.
The report also analyzed the implementation of the Joint Forum Principles for the Supervision of Financial Conglomerates; specifically, the report focused on Principle 6 relating to supervisory cooperation, coordination and information sharing. The report identified several gaps and issues regarding the implementation of the Principle, which include:
- not all jurisdictions have in place a specific supervision framework for financial conglomerates or coordination agreements with other supervisors of financial conglomerates on a cross-sectoral level;
- gaps exist in the coordination of on-site and off-site supervision with other domestic or international supervisors, and in arrangements or processes for taking enforcement actions with other domestic or international authorities; and
- there are insufficient specific mechanisms for supervisory cooperation and coordination in periods of crisis or stress, thereby possibly hindering effective intervention in times of crisis.
The report ultimately found that although there are gaps, general progress has been made implementing Principle 6. The Joint Forum stated that jurisdictions should be allowed to make further progress with their implementation of the Principles. (While the report broke out certain of the answers from the 14 jurisdictions, it did so without identifying which jurisdictions had given which responses.)
See: Joint Forum Report "Report on Supervisory Colleges for Financial Conglomerates".