Being a Good Host: How Important is Ring-Fencing in Bank Prudential Regulation and Supervision

2014 ◽  
Author(s):  
Katia D'Hulster
Keyword(s):  
Prudential Regulation ◽  
Regulation And Supervision

Part I The Industry and Regulatory Context, 2 The UK Regulatory Framework

2014 ◽  
Author(s):  
McMeel Gerard
Keyword(s):  
Financial Services ◽  
Regulatory System ◽  
Regulatory Framework ◽  
Insurance Companies ◽  
Prudential Supervision ◽  
Prudential Regulation ◽  
Financial Firms ◽  
Regulation And Supervision ◽  
The Uk ◽  
Financial Regulatory

This chapter discusses the UK financial regulatory system. The two principal financial regulators are the Prudential Regulation Authority (PRA), responsible for the macro-prudential regulation and supervision of major institutions such as banks and insurance companies; and the Financial Conduct Authority (FCA), with a remit embracing the conduct of business of all financial firms and the micro-prudential supervision of smaller firms. The two regulators were created by the re-writing of the framework Act, the Financial Services and Markets Act 2000, by the Financial Services Act 2012. The chapter provisions of the 2000 Act and describes the FCA's and the PRA's Handbooks.

Central Banking and Prudential Regulation

2019 ◽  
pp. 456-481
Author(s):  
Kevin Davis
Keyword(s):  
Financial Crisis ◽  
Risk Taking ◽  
Central Banking ◽  
Regulatory Activity ◽  
Regulatory Requirements ◽  
Prudential Regulation ◽  
Basel Accord ◽  
Financial Deregulation ◽  
Regulation And Supervision ◽  
Oriented Approach

The financial deregulation in major Western economies in the 1970s and 1980s freed banks from many preexisting constraints, facilitating competition and greater risk-taking and eventually leading to prudential regulation and supervision as a specific, well-defined area of regulatory activity. It was codified in the Basel Accord, which allowed banks considerable discretion in how they met broadly specified regulatory requirements and was focused primarily on individual bank safety. The financial crisis of 2007–2008 highlighted numerous weaknesses in the design and application of this approach. The previous micro-orientation has been complemented by a macroprudential focus, suggesting a strengthened case for central bank involvement in prudential regulation. Microprudential regulation has been strengthened, with changes reflecting less confidence in the previous market-oriented approach and more reliance on direct controls. The wheel has turned such that prederegulation approaches and attitudes have been incorporated into the postcrisis design and approach of prudential regulation.

Macroprudential Policy - An Organizing Framework

Policy Papers ◽  
2011 ◽  
Vol 11 (17) ◽  
Author(s):  
Keyword(s):  
Systemic Risk ◽  
Financial Crises ◽  
Financial Stability ◽  
Macroprudential Policy ◽  
Macroeconomic Policies ◽  
Prudential Regulation ◽  
Clear Separation ◽  
The Past ◽  
Regulation And Supervision ◽  
Global Nature

Macroprudential policy is a complement to microprudential policy and it interacts with other types of public policy that have an impact on systemic financial stability. Indeed, prudential regulation, as carried out in the past, also had some macroprudential aspects, and the recent crisis has reinforced this focus; hence, a clear separation between “micro” and “macro” prudential, if useful conceptually, is difficult to delineate in practice. Moreover, no matter how different policy mandates are structured, financial stability tends to be a common responsibility, reflecting the far reaching consequences of financial crises. This calls for coordination across policies, to ensure that systemic risk is comprehensively addressed. Equally important, macroprudential policy is no substitute for sound policies more broadly, including, in particular, strong prudential regulation and supervision, and sound macroeconomic policies. Operational independence in other policy areas, including monetary and microprudential policy, should not be undermined in the name of macroprudential policy. Finally, given the global nature of the financial system, the multilateral aspects of macroprudential policy will need to be fully considered—an important aspect that is only touched upon in this paper.

scholarly journals Review of financial liberalisation policies in developing countries from 1986 to 2016

2021 ◽  
Vol 11 (4) ◽  
pp. 47-61
Author(s):  
Gladys Gamariel
Keyword(s):  
Interest Rate ◽  
Good Governance ◽  
Developing Economies ◽  
Principal Component ◽  
Policy Formulation ◽  
State Ownership ◽  
Prudential Regulation ◽  
Bank Supervision ◽  
Regulation And Supervision ◽  
Financial Liberalisation

By the late 1980s, most sub-Saharan African (SSA) countries had undertaken policy reforms to abolish financial sector controls. While studies have produced several liberalization indices, available measures are limited in scope and time coverage. The purpose of this research is to address this limitation by constructing a new set of indicators that tracks the magnitude, pace, and timing of reform aspects in 26 countries between 1986 and 2016. The paper uses questions and coding rules from a framework developed by Detragiache, Abiad, and Tressel (2008) to collect and analyse data on seven liberalization policies: credit controls, interest rate controls, entry barriers, state ownership of banks, capital account restrictions, prudential regulation and supervision, and securities market policy. Results indicate that interest rate liberalization is the most advanced dimension, followed by the abolition of entry restrictions. The least advanced dimension is bank supervision and prudential regulation. An aggregate liberalization index constructed using principal component analysis (PCA) confirms advancements in financial liberalization over time. This study is significant as it provides indicators critical for policy formulation in developing economies whose performance hinges on sufficiently developed and stable financial sectors. The study recommends implementing further reforms to update and modernise prudential regulation and supervision of banks in line with good governance.

scholarly journals Italy

2020 ◽  
Vol 20 (236) ◽  
Author(s):  
Keyword(s):  
Money Laundering ◽  
Euro Area ◽  
Regulatory Framework ◽  
Prudential Regulation ◽  
Governance Framework ◽  
Assessment Program ◽  
Regulation And Supervision ◽  
Banking Institutions ◽  
Financing Of Terrorism ◽  
Supervisory Practices

This note presents a targeted review of selected aspects concerning the regulation and supervision of banks in Italy and their governance framework. The review was carried out as part of the 2019 Italy Financial Sector Assessment Program (FSAP) and was based on the regulatory framework in place and the supervisory practices employed as of March 2019. Since the regulation and supervision of significant banking institutions (SIs), including Italian SIs, was extensively covered as part of the 2018 Euro Area FSAP, this note focuses on the prudential regulation and supervision of less significant institutions (LSIs). In addition, the note reviewed regulatory and supervisory areas not covered by the wider EU regulatory framework, such as the supervision of anti-money laundering and countering the financing of terrorism (AML/CFT) and related party transactions, which apply to both SIs and LSIs in Italy.

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