FSB publishes SIB supervisory review: FSB published a thematic peer review on supervisory frameworks and approaches for systemically important banks (SIBs). The review found that regulators have taken significant steps to improve supervisory effectiveness. They are using a broader range of tools and have improved dialogue with senior management at SIBs. Feedback from the 13 global systemically important banks (G-SIBs) surveyed as part of the peer review confirmed these findings. The G-SIBs noted that both supervisory intensity (especially in relation to capital and liquidity) and supervisory actions had strengthened. However, the review did find that more work was needed to improve and assess supervisory effectiveness, in particular in relation to cross-border supervisory co-operation. The report goes on to recommend that supervisory authorities:

  • clearly define their supervisory strategy and priorities, establish a formal process for evaluating supervisory effectiveness against this, and make further progress in attracting and retaining skilled supervisory resources;
  • further strengthen their engagement with banks, particularly at board level and with senior management, with the objective of enhanced understanding of G-SIBs’ business models forming part of supervisory risk assessments;
  • press banks to improve their information technology and management information systems to provide robust and timely information on the institutions’ risk on an enterprise-wide basis; and
  • continue to ensure that data requests are effectively targeted and evaluated for purpose and intent, including via co-ordination between home and host authorities.

The report also recommends that the Basel Committee on Banking Supervision assists supervisors in establishing effective supervisory strategies and risk appetite frameworks. (Source: FSB Publishes Peer Review on Supervisory Frameworks and Approaches for SIBs)