The Financial Services Agency of Japan (JFSA) has issued the English translation of its draft report on the supervisory approaches and calls for public comments by February 14, 2018. The report aims to present how JFSA intends to transform its supervisory approaches to enable both the JFSA and the industry to continuously benefit from the interaction between them and reform and innovate themselves. This report describes the approaches commonly applicable to supervision of financial institutions subject to the JFSA regulations.
The existing supervisory approaches rely on the elaborate system of checklists. Rigorous loan-by-loan review conducted by JFSA contributed to the resolution of the non-performing loan problems, but might not be effective in preventing the next crisis. Compliance checks repeated year after year by JFSA have made firms improve their internal control, but may also have worked to stifle their initiative to innovate.
A panel of experts commissioned by JFSA, the Advisory Group on Supervisory Approaches, submitted a report “Transforming the JFSA's supervisory approaches” to JFSA in March 2017. It recommended JFSA to recast its existing supervisory approaches, which focus on backward-looking, element-by-element check on the compliance with formal requirements, into those based on substantive, forward-looking, and holistic analysis and judgment. The panel also recommended JFSA to review whether its approaches are consistent with the ultimate goal of financial regulation. This report is the response of JFSA to the panel’s report and describes how it intends to implement the panel’s recommendations.
Comment Due Date: February 14, 2018
Keywords: Asia Pacific, Japan, Banking, Securities, Insurance, Supervisory Approaches, JFSA
Previous ArticleBCBS Issues Basel III Monitoring Updates for September 2017
BoE published a statistical notice (Notice 2020/9) explaining the approach for treatment of payment holidays on the profit and loss return or Form PL.
BoE updated the known issues document for the statistical reporting Forms AS and FV.
FED announced individual capital requirements for 34 large banks and these requirements go into effect on October 01, 2020.
SRB published a set of documents to give operational guidance to banks on implementation of the bail-in tool.
BIS published an update on the G20 TechSprint Initiative, which was launched in April 2020 and aims to highlight the potential for technologies to resolve regulatory compliance (regtech) and supervisory (suptech) challenges.
OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts.
EBA updated the report on the implementation of selected COVID-19 policies.
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.