International approaches to regulation

Question 1

Banking for International Settlements

Answer 1

Central banks for central banks

Forums to encourage national governments to adopt laws. Does not automatically have force in national or international law.

International Banking Federation facilitates this

Question 2

Basel Committee on Banking Supervision

Answer 2

Part of the BIS

Forums for central bankers and regulators from numerous countries

sharing of best practices to enhance financial stability

10 principles

1) The standards implementation group
2) The accounting task force
3) The Basel consultative group
4) policy development group

Question 3

Basel III

Answer 3

1) Reg Capital requirements
2) Supervisory review process
3) Market discipline

Question 4

Financial Stability Board

Answer 4

Co-ordinates international level national authorities and standard setting bodies responsible for financial stability

Face to face twice a year
Hosted by BIS

The Financial Stability Board only name the principles according to IOSCO, BCBS and IAIS as key standards in the financial regulatory and supervisory area.

Question 5

International Organisation of Securities Commissions (IOSCO)

Answer 5

Supervision of stock markets

• prevent systemic risk
• protect investors
• markets fair efficient and transparent

38 principles created - 15 principles relevant to securities market

Question 6

Three regulatory authorities under ESA (European Supervisory Authorities)

Answer 6

1) ESMA (European Securities and Markets Authority) - Financial market places
2) EBA( European Banking Authority) - regulate banks
3) European Insurance and Occupational Pensions Authority (EIOPA) - regulate insurance firms and pension fund management firms

Question 7

ESA

Answer 7

European Supervisory Authorities

Single EU rule book

Question 8

Risk - based supervision

Answer 8

Assess the impact and probability of a risk crystallising

Question 9

Rules based versus principle based supervision

Answer 9

Specific and prescriptive

vs

High level outcomes focused

Question 10

Thematic based supervision

Answer 10

Focus on particular market, practice or product

Question 11

Relationship based supervision

Answer 11

staff members of regulators assigned specific, high impact firms

Question 12

Inspection & Compliance programmes

Answer 12

Preventative not necessarily based on suspicion

disclosure of info

use of technology

On spite inspections

Question 13

Not specified investments

Answer 13

• Currencies and precious metals
• Futures for commercial purposes
• Property
• option on crude oil

Question 14

Memoranda of understanding

Answer 14

• Sets out relationship between regulators
• identifies when assistance should be sought
• commitment on confidentiality

Question 15

Home State Rules

Answer 15

rules where firm is licensed

• facilitates a single market

Question 16

Host State Rules

Answer 16

rules in jurisdiction of the customer

• clearer protection for customers

Question 17

Supervisory colleges

Answer 17

Multilateral working groups of relevant supervisors

Question 18

Who regulates Singapore Exchange Limited?

Answer 18

Monetary Authority of Singapore (MAS)