Featured Product

    BCBS Publishes Report on Frameworks for Early Supervisory Intervention

    March 29, 2018

    BCBS published a report presenting the findings of a range-of-practice study on how supervisors worldwide have adopted frameworks, processes, and tools to support early supervisory intervention. The report examines approaches to early supervisory intervention, with a view to providing supervisors with the opportunity to further their understanding of this challenging issue.

    Based on the practices observed, early supervisory intervention involves supervisors taking actions to correct an identified weakness or potential issue before rules or buffers are materially breached. In the context of prudential supervision, early intervention programs are aimed at minimizing the impact of material distress and the probability of failure of an individual bank or group of banks on the broader financial system. Early supervisory intervention is firmly entrenched within a risk-based approach to supervision, where the intensity of supervisory attention escalates as the risks and impact that an institution poses to financial stability increases. The study finds that early supervisory actions taken by supervisors depend not only on the expert judgment of supervisors but also, to a large extent, on an organizational infrastructure that sets in place:

    • Supervisory reinforcement through both vertical and horizontal risk assessments to maximize the early detection of risks
    • A clear framework for when actions should be taken
    • Internal governance processes and programs to support supervisory development and capacity-building

    No single supervisor uses or adopts all of the practices outlined in this report. Rather, these practices are a compilation of the range of approaches being used in various jurisdictions. Case studies are included to help illustrate some of these methods. The report also recognizes the extensive literature and guidance on the supervisory review process, supervisory frameworks, and methods, which many authorities use as part of their day-to-day on- and off-site monitoring. This report limits its references to practices, methodologies and tools used in the context of early supervisory intervention.

     

    Related Link: Press Release

    Keywords: International, Banking, Early Intervention Measures, Banking Supervision, BCBS

    Related Articles
    News

    FSI Paper Examines Use of Suptech Initiatives by Financial Authorities

    The Financial Stability Institute (FSI) of BIS published a paper that examines the suptech developments by analyzing suptech initiatives of 39 financial authorities globally.

    October 17, 2019 WebPage Regulatory News
    News

    US Agencies Consult on Policy Statement on Allowance for Credit Losses

    US Agencies (FDIC, FED, NCUA, and OCC) are consulting on the policy statement on allowances for credit losses and on the guidance on credit risk review systems.

    October 17, 2019 WebPage Regulatory News
    News

    PRA Consults on Approach to Supervising Liquidity and Funding Risks

    In consultation paper (CP27/19), PRA published a proposal (CP27/19) to update the supervisory statement SS24/15 on the PRA approach to supervising liquidity and funding risk.

    October 17, 2019 WebPage Regulatory News
    News

    FSB Report Examines Implementation and Impact of G20 Financial Reforms

    FSB published fifth annual report on the implementation and effects of the G20 financial regulatory reforms.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Launches Consultation on Comprehensive Pillar 3 Disclosures

    EBA proposed the new comprehensive implementing technical standard (ITS) for public disclosures by financial institutions.

    October 16, 2019 WebPage Regulatory News
    News

    EBA Consults on Revised Technical Standards on Supervisory Reporting

    EBA launched a consultation on the revised implementing technical standards, or ITS, on supervisory reporting.

    October 16, 2019 WebPage Regulatory News
    News

    BoE and FCA Examine Use of Machine Learning in Financial Sector in UK

    BoE and FCA published a report on the results of a joint survey by BoE and FCA in 2019 to better understand the use of machine learning in the financial services sector in UK.

    October 16, 2019 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel Framework

    BCBS published the seventeenth progress report on adoption of Basel regulatory framework.

    October 16, 2019 WebPage Regulatory News
    News

    APRA Proposes Measures to Strengthen Capital for Bank Depositors

    APRA proposed changes to APS 111, which is the prudential standard on measuring capital adequacy and establishes the criteria for regulatory capital requirements of authorized deposit-taking institutions.

    October 15, 2019 WebPage Regulatory News
    News

    EIOPA Consults on Technical Advice for the 2020 Review of Solvency II

    EIOPA is consulting on an opinion that sets out technical advice for the 2020 review of Solvency II.

    October 15, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3981