FSC published a summary of the meeting that its Chair Eun Sung-soo held with the CEOs of financial conglomerates and experts from the private sector. The meeting was intended to discuss ways to improve the supervision of financial conglomerates. The supervision of financial conglomerates is an effort to systematically manage group-wide risks of financial companies, which has become widely in use in advanced countries. FSC plans to take into consideration the opinions from this meeting for the revision of best practice guidelines on the supervision of financial conglomerates, which it expects to finalize by April. The revised guidelines will go into effect in May this year.
As per Mr. Sung-soo, FSC plans to improve the supervisory framework in the following three areas:
- Capital adequacy assessment. The plan is to combine the current distinct "risk concentration" and "risk transfer" categories into a single comprehensive framework for assessing capital adequacy requirements and provide incentives for self-regulatory effort for risk management.
- Disclosure rules. Financial conglomerates shall gather required information from subsidiaries and provide group-wide disclosure of information on their financial statements, investment structures, and risks in an easily understandable format.
- Internal control requirements. Financial conglomerates shall organize and operate an internal control system, through which a group-wide consultative body can be introduced to facilitate discussion by compliance officers on group-wide internal control policy and other relevant issues.
Related Link: Press Release (PDF)
Keywords: Asia Pacific, Korea, Banking, Financial Conglomerates, Disclosures, Capital Adequacy, Internal Control, Operational Risk, FSC
Previous ArticleFDIC Publishes Guide to Help with Third-Party Risk Management
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.