General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
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 Insights

US Agencies Propose Revisions to FFIEC Reports 031, 041, 051, and 101

US Agencies (FDIC, FED, and OCC) propose to extend for three years, with revision, FFIEC 031, FFIEC 041, FFIEC 051, and FFIEC 101.

February 21, 2019 WebPage Regulatory News

OFR Adopts Data Collection Rule on Centrally Cleared Repo Transactions

OFR adopted a final rule to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market.

February 20, 2019 WebPage Regulatory News

FHFA Finalizes Rule on Federal Home Loan Bank Capital Requirements

FHFA published, in Federal Register, the final rule to adopt, as its own, portions of the regulations of the Federal Housing Finance Board pertaining to the capital requirements for the Federal Home Loan Banks.

February 20, 2019 WebPage Regulatory News

PRA Publishes PS4/19 on Loss-Absorbency Mechanism Under Solvency II

PRA published a policy statement (PS4/19) that provides feedback on responses to the consultation paper (CP27/18) on adjusting for the reduction of loss absorbency where own fund instruments are taxed on write down under Solvency II.

February 20, 2019 WebPage Regulatory News

SRB Publishes Framework for Performing Valuations in Resolution

The framework provides independent valuers and the general public with an indication of the expectations of SRB on the principles and methodologies for valuation reports, as set out in the legal framework.

February 19, 2019 WebPage Regulatory News

BIS Paper on Effect of Securities Lending on OTC Market Liquidity

BIS published a working paper that studies how securities lending affects over-the-counter market (OTC) liquidity.

February 19, 2019 WebPage Regulatory News

US Agencies Extend Consultation Period for the Proposed SA-CCR

US Agencies (FDIC, FED, and OCC) extended the comment period for a proposed rule to update their standards for how firms measure counterparty credit risk posed by derivative contracts.

February 18, 2019 WebPage Regulatory News

FED Extends Consultation Period for Stress Testing Rule

FED has published in the Federal Register a notice proposing amendments to the company run and supervisory stress test rules.

February 15, 2019 WebPage Regulatory News

EBA Single Rulebook Q&A: Third Update for February 2019

EBA published answers to two questions under the Single Rulebook question and answer (Q&A) updates for this week.

February 15, 2019 WebPage Regulatory News

SEC Proposes Rule on Risk Mitigation Techniques for Uncleared SBS

SEC proposed a rule that would require the application of specific risk-mitigation techniques to portfolios of security-based swaps (SBS) that are not submitted for clearing.

February 15, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2623