金融部门评估规划（Financial Sector Assessment）手册：Chapter 5 Evaluating Financial Sector Supervision - Banking, Insurance, and Securities Markets.pdf

Financial Sector Assessment:A Handbook national standards on financial sector supervision in banking,insurance,and securities markets and the issues in assessing compliance with these standards are taken up in detai in the subsequent sections of this chapter (sections 5.3-5.5). 5.1 Legal and Institutional Framework for Financial Supervision The legal framework empowering and governing the regulator and the rules used to regulate the various markets and institutional types form the comnerstone of the orderly 5 functioning and development of the financial system.In this respect,the key laws are the law governing the central bank,banking and financial institutions,capital market laws and insurance laws,and those laws are backed by adequate provisions on the efficient and mes embedded in the ae.The key eem ncial sed already par of a broader range accounting,auditing,and disclosure,and so forth. The legal and institutional framework for financial supervision should cover (a)the identity of the supervisor(central bank or separate agency),terms of reference,powers, and authority of the supervisory agency:(b)the authority and processes for the issuance of regulations and guidance:(c)the authority and tools to monitor and verify compliance with the regulations and principles of safe and sound operations;(d)the authority and actions to remedy,enforce,take contro,and restructu and (e)the procedures to deli- ons that ca The legal fram and at nce sibilities of different er laws ips among the super visory agency,any deposit insuranc agency,and other financia sector supervisors. addition,the relationship with the Ministry of Finance needs to be clear and to provide sufficient operational autonomy to the supervisor.If a country has put in place a unified financial supervisory agency,then this arrangement needs to be laid down in a law,and its autonomy and powers need to be explicit. The legal and regulatory basis of financial supervision should also support the core components of all financial supervisory standards.Those components consist of the fol- wng categories which refers to the objec enforce. ibures tha ulate a ·Regul ctices tory practices,which refer to the practical application of laws,rules,and procedures .Prudential framework,which refers to internal controls and governance arrange ments to ensure prudent management and operations by financial firms .Financial integrity and safety net arrangements,which refer to (a)the regulatory policies and instruments designed to promote fairness and integrity in the opera- 102

102 Financial Sector Assessment: A Handbook 1 I H G F E D C B A 12 11 10 9 8 7 6 5 4 3 2 national standards on financial sector supervision in banking, insurance, and securities markets and the issues in assessing compliance with these standards are taken up in detail in the subsequent sections of this chapter (sections 5.3–5.5). 5.1 Legal and Institutional Framework for Financial Supervision The legal framework empowering and governing the regulator and the rules used to regulate the various markets and institutional types form the cornerstone of the orderly functioning and development of the financial system. In this respect, the key laws are the law governing the central bank, banking and financial institutions, capital market laws, and insurance laws, and those laws are backed by adequate provisions on the efficient and reliable payment system infrastructure. The provisions are sometimes embedded in the laws or else are governed by separate legislation. The key elements of sound financial sector laws are already part of the existing international standards on supervision. Effective supervision also requires certain preconditions that are embedded in a broader range of laws such as laws on bankruptcy; company laws; contracts laws; and laws governing accounting, auditing, and disclosure, and so forth. The legal and institutional framework for financial supervision should cover (a) the identity of the supervisor (central bank or separate agency), terms of reference, powers, and authority of the supervisory agency; (b) the authority and processes for the issuance of regulations and guidance; (c) the authority and tools to monitor and verify compliance with the regulations and principles of safe and sound operations; (d) the authority and actions to remedy, enforce, take control, and restructure; and (e) the procedures to delicense and liquidate problem institutions that cannot be restructured. The legal framework should clarify the roles and responsibilities of different agencies involved in financial supervision. The central bank laws, banking laws, and other laws governing financial sector supervision need to specify the relationships among the supervisory agency, any deposit insurance agency, and other financial sector supervisors. In addition, the relationship with the Ministry of Finance needs to be clear and to provide sufficient operational autonomy to the supervisor. If a country has put in place a unified financial supervisory agency, then this arrangement needs to be laid down in a law, and its autonomy and powers need to be explicit. The legal and regulatory basis of financial supervision should also support the core components of all financial supervisory standards. Those components consist of the following categories: • Regulatory governance, which refers to the objectives, independence, enforcement, and other attributes that provide the capacity to formulate and to implement sound regulatory policies and practices • Regulatory practices, which refer to the practical application of laws, rules, and procedures • Prudential framework, which refers to internal controls and governance arrangements to ensure prudent management and operations by financial firms • Financial integrity and safety net arrangements, which refer to (a) the regulatory policies and instruments designed to promote fairness and integrity in the opera-

103 Chapter 5: Evaluating Financial Sector Supervision: Banking, Insurance, and Securities Markets 1 I H G F E D C B A 12 11 10 9 8 7 6 5 4 3 2 tions of financial institutions and markets and (b) the creation of safeguards for depositors, investors, and policyholders, particularly during times of financial distress and crisis Those four components are illustrated in figure 5.1. For example, in the area of regulatory governance, Insurance Core Principles (ICPs) relating to supervisory objectives and supervisory authority require that insurance legislation include a clear statement on the mandates of the supervisory authority and give authority to issue and enforce rules by administrative means. Many of the other criteria and core principles—such as those relating to independence and accountability—could be part of primary legislation or part of regulations and bylaws issued pursuant to the legislation. The institutional framework for supervision—and the laws that support it—needs to reflect the financial market structure and the broader institutional and policy environment. The institutional framework should be flexible enough to adapt to the shifts in market structure and in the broader environment to avoid regulatory gaps and to support financial innovation and development. For example, a poorly structured organizational Figure 5.1. Financial Standards and Their Four Main Components • Objectives of regulation • Independence and adequate resources • Enforcement powers and capabilities • Clarity and transparency of regulatory process • External participation Regulatory Governancea Note: This four-component framework is based on the paper “Financial Sector Regulation: Issues and Gaps” (IMF 2004a). The allocation of insurance principles into various components is based on the 2000 IAIS standard. For a discussion of specific core principles under each standard, see chapters 5.3–5.5. a. Includes BCP 1 and 19; ICP 1; IP: 1, 2, 3, 4, 5, 6, and 7. b. Includes BCP 2, 3, 4, 6, 16, 17, 18, 20, 22, 23, 24, and 25; ICP 2, 3, 4, 5, 12, 13, 15, 16, and 17; IOP 8, 9, 10, 11, 12, 13, and 29. c. Includes BCP 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14; ICP 6, 7, 9, and 10; IOP 17, 18, 20, 21, 22, 23, 25, and 27. d. Includes BCP 15 and 21; ICP 11 and 16; IOP 14, 15, 16, 19, 24, 26, 28, and 30. BCP—Basel Core Principles ICP—Insurance Core Principles of International Association of Insurance Supervisors IOP—International Organization of Securities Commission’s Objectives and Principles of Securities Regulation • Group-wide supervision • Monitoring and on-site inspection • Reporting to supervisors • Enforcement • Cooperation and information sharing • Confidentiality • Licensing, ownership transfer, and corporate control • Qualifications Regulatory Practicesc • Markets (integrity and financial crime) • Customer protection • Information, disclosure, and transparency Financial Integrity and Safety Netd • Risk management • Risk concentration • Captial requirements • Corporate governance • Internal controls Prudential Frameworkb Figure 5.1. Financial Standards and Their Four Main Components

Financial Sector Assessment:A Handbook framework for supervision could impede financial innovation or cause overregulatior that stifles development.Similarly,an inappropriate organizational structure may cause regulatory gaps and regulatory arbitrage that may allow excessive risk taking and finan cial instability.An institutional framework for financial stability is.however.quite broad and goes beyond the institutions conducting financial supervision(such as the sectoral supervisor or integrated supervisor or central bank with supervision responsibilities).It includes other institutions and policy authorities that have jurisdictions over the broader financial infra mic policies.For nd i ency regi are 5 supervis but are crit ution al framework also includes the specific coordinating arrangements to ensure information exchange and policy coordination among all these policy components-supervisory,infrastructure macroeconomic,and macroprudential-that interact to produce financial stability and financial development.In most cases,the Ministry of Finance will have the overall coor- dinating powers,and in some cases,there could be specific coordinating committees that htgCetrcrcGtmetnta onal structure of financial regulation and s per. a ma or of p and public e in several ountr .Alth many countries have moved in a uni cy for prudential eaub and supervision,the case for integrating conduct of business regulation and prudentia supervision within the same agency is less powerful and considerably less common.Also the issue of how to tailor the structure of regulation to specific features- -operationa complexities and transaction characteristics-of regulated institutions has become a pressing issue,for example,in the context of expanding access to the poor or in managing large and complex financial institutions(LCFIs).The issues in assessing the institutional cture are taken up in greater detail in appendix F(Institutional Structure of Financial 5.2 Aspects of Financial Safety Nets Financia safety nets of three main elements (a)framework y support (b)deposit insurance plus investor and policyholder protection schemes,and(c)crisis management policies.Each element of the safety net is designed to prevent situations in which the failure or potential failure of individual financial institutions disrupts the intermediation function of financial markets and,thus,the broader economic activity Facilities for liquidity support attempt to prevent liquidity difficulties in one institution (or market)from being transmitted throughout the financial system.Deposit insurance and other protection schemes s are desi med to provide confidenc to the least info deposit ors an C ors with respect to the safety of thei funds and hereb overs from n anagement policies are minim sruptio caused by widespread difficulties in the financial sector and thus avoid those difficultie from spilling over into broader economic activity.Therefore,in assessing the adequacy of the financial sector safety net,all three elements,including their legal underpinnings and their interconnections,should be considered. 104

104 Financial Sector Assessment: A Handbook 1 I H G F E D C B A 12 11 10 9 8 7 6 5 4 3 2 framework for supervision could impede financial innovation or cause overregulation that stifles development. Similarly, an inappropriate organizational structure may cause regulatory gaps and regulatory arbitrage that may allow excessive risk taking and financial instability. An institutional framework for financial stability is, however, quite broad and goes beyond the institutions conducting financial supervision (such as the sectoral supervisor or integrated supervisor or central bank with supervision responsibilities). It includes other institutions and policy authorities that have jurisdictions over the broader financial infrastructure and macroeconomic policies. For example, accounting policies, competition policies, and insolvency regimes are matters outside the jurisdiction of supervision but are critical for financial stability. The broader institutional framework also includes the specific coordinating arrangements to ensure information exchange and policy coordination among all these policy components—supervisory, infrastructure, macroeconomic, and macroprudential—that interact to produce financial stability and financial development. In most cases, the Ministry of Finance will have the overall coordinating powers, and in some cases, there could be specific coordinating committees that bring together representatives of different policy authorities. The appropriate design of the institutional structure of financial regulation and supervision has become a major issue of policy and public debate in several countries. Although many countries have moved in the direction of a unified agency for prudential regulation and supervision, the case for integrating conduct-of-business regulation and prudential supervision within the same agency is less powerful and considerably less common. Also, the issue of how to tailor the structure of regulation to specific features—operational complexities and transaction characteristics—of regulated institutions has become a pressing issue, for example, in the context of expanding access to the poor or in managing large and complex financial institutions (LCFIs). The issues in assessing the institutional structure are taken up in greater detail in appendix F (Institutional Structure of Financial Regulation and Supervision). 5.2 Aspects of Financial Safety Nets Financial safety nets consist of three main elements: (a) a framework for liquidity support, (b) deposit insurance plus investor and policyholder protection schemes, and (c) crisis management policies. Each element of the safety net is designed to prevent situations in which the failure or potential failure of individual financial institutions disrupts the intermediation function of financial markets and, thus, the broader economic activity. Facilities for liquidity support attempt to prevent liquidity difficulties in one institution (or market) from being transmitted throughout the financial system. Deposit insurance and other protection schemes are designed to provide confidence to the least-informed depositors and investors with respect to the safety of their funds and thereby avoid spillovers from runs. Crisis management policies are established to minimize the disruption caused by widespread difficulties in the financial sector and thus avoid those difficulties from spilling over into broader economic activity. Therefore, in assessing the adequacy of the financial sector safety net, all three elements, including their legal underpinnings and their interconnections, should be considered

Chapter 5:Ealating Financial Sector Supervision:Banking,Insurance,and Secrities Markets 5.2.1 Frameworks for Liquidity Support Liquidity support is a key element of the financial sector safety net.Two somewhat dis tinct functi ne operating at normal times and another in times of crisis identified.The first is the lender-of-last-resort(LOLR)function,which typically operates in the normal course of day-to-day monetary policy operations.Nearly all central banks have the authority to provide credit to temporarily illiquid,but still solvent,institutions This kind of support can provide an important buffer against temporary disturbances in financial markets s.LOLR actions may elp to prevent in one bank from be nsmitted to other finar throu gh the payment system.LOLR actions are not intended to prevent bank failures but,rather,to prevent spillovers associated with liquidity shortages-particularly in money and interbank mar kets-from interrupting the normal intermediation function of financial institutions and markets All central banks ha ea LOLR facility in place,but conditions and modalitiesare often no vell defined.Ill-defined conditions may giver to moral ha azard and forbear ance,with adverse consequences for the financial system.Thus,an important component in understanding the adequacy of the financial safety net is assessing the adequacy of the central bank's operational procedures for LOLR support. Somewhat distinct from the normal LOLR function is central bank emergency lend. is important fo cntabanks to have procedures in place to provide emergen lending,with different modalities and conditio s,in times of (imminent)crises.In of emergen cies,a numb of central banks have the legal authority to provide liquidity over and above what is allowed within the normal facility.Having those types of proce dures available can be very useful to provide temporary support to the system in times of severe disruptions.However,the very existence of those procedures might lead to moral hazard in banks,causing them to hold less liquidity than they otherwise would do and to take other risks.As a result,the providing of en of the central bank ( ve ambiguity s and a form of contingency planning-shoul be in place for emergency lending,whic should follow sound practices.In particular,the broad principles and the procedures gov- eming the decisions on emergency lending could be established and made transparent. Key features of emergency lending procedures that should be considered include the following: ·Resources should be ade available only to banks that are considered solvent but are coping w vith liquidity problems that might endanger the entire system (e.g. too-big-to-fail cases). Lending should take place speedily. .Lending should be short term;even then,it should be provided conservatively because the situation of a bank might deteriorate quickly. .Lending should not take place at subsidized rates,but the rate also should not be then deter orate the bank's po Thehoolren de valued sonerva tively.However,at times of severe crisis,it might be necessary for the central bank 105

105 Chapter 5: Evaluating Financial Sector Supervision: Banking, Insurance, and Securities Markets 1 I H G F E D C B A 12 11 10 9 8 7 6 5 4 3 2 5.2.1 Frameworks for Liquidity Support Liquidity support is a key element of the financial sector safety net. Two somewhat distinct functions––one operating at normal times and another in times of crisis––need to be identified. The first is the lender-of-last-resort (LOLR) function, which typically operates in the normal course of day-to-day monetary policy operations. Nearly all central banks have the authority to provide credit to temporarily illiquid, but still solvent, institutions. This kind of support can provide an important buffer against temporary disturbances in financial markets. LOLR actions may help to prevent liquidity shortages in one bank from being transmitted to other financial institutions, for example, through the payment system. LOLR actions are not intended to prevent bank failures but, rather, to prevent spillovers associated with liquidity shortages—particularly in money and interbank markets—from interrupting the normal intermediation function of financial institutions and markets. All central banks have a LOLR facility in place, but conditions and modalities are often not well defined.1 Ill-defined conditions may give rise to moral hazard and forbearance, with adverse consequences for the financial system. Thus, an important component in understanding the adequacy of the financial safety net is assessing the adequacy of the central bank’s operational procedures for LOLR support. Somewhat distinct from the normal LOLR function is central bank emergency lending. It is important for central banks to have procedures in place to provide emergency lending, with different modalities and conditions, in times of (imminent) crises. In cases of emergencies, a number of central banks have the legal authority to provide liquidity over and above what is allowed within the normal facility. Having those types of procedures available can be very useful to provide temporary support to the system in times of severe disruptions. However, the very existence of those procedures might lead to moral hazard in banks, causing them to hold less liquidity than they otherwise would do and to take other risks. As a result, the providing of emergency credit is typically at the discretion of the central bank (constructive ambiguity). Nonetheless, internal procedures and policies––a form of contingency planning––should be in place for emergency lending, which should follow sound practices. In particular, the broad principles and the procedures governing the decisions on emergency lending could be established and made transparent. Key features of emergency lending procedures that should be considered include the following:2 • Resources should be made available only to banks that are considered solvent but are coping with liquidity problems that might endanger the entire system (e.g., too-big-to-fail cases). • Lending should take place speedily. • Lending should be short term; even then, it should be provided conservatively because the situation of a bank might deteriorate quickly. • Lending should not take place at subsidized rates, but the rate also should not be penal because it might then deteriorate the bank’s position. • The loan should be fully collateralized, and collateral should be valued conservatively. However, at times of severe crisis, it might be necessary for the central bank