Towards a coordinated manager: encounters from The Netherlands.


76 views
Uploaded on:
Description
Towards an incorporated boss: encounters from The Netherlands Aerdt Houben Head Supervisory System division De Nederlandsche Bank Washington D.C., 6 June 2006 Diagram 1. What decides the structure of money related supervision? Global pattern towards incorporated supervision
Transcripts
Slide 1

Towards an incorporated chief: encounters from The Netherlands Aerdt Houben Head Supervisory Strategy division De Nederlandsche Bank Washington D.C., 6 June 2006

Slide 2

Outline 1. What decides the structure of money related supervision? Universal pattern towards incorporated supervision Advantages of coordinated supervision Alternative cross-sectoral models: one size does not fit each of the 2. Why did The Netherlands change, and how? Foundation Steps towards the new system The Twin Peaks model: merger and rearrangement What have we fulfilled in this way? Early encounters First results

Slide 3

1. Worldwide pattern towards incorporated supervision 1971 2002 2003 2004 2006 1985 1987 1988 1992 1999 2000 Norway Denmark Austria Germany Estonia Australia Iceland Ireland Czech R. Slovakia Canada Belgium The Netherlands AFM: CONDUCT DNB: PRUDENTIAL Singapore UK Japan Hungary Sweden

Slide 4

1. Favorable circumstances of incorporated supervision Enhances the general nature of supervision: Promotes cross-sectoral consistency of supervision Facilitates better observing of the monetary framework Allows fast arrangement reactions Reduces scope for administrative cover or white spots Maximizes economies of scale and extension in supervision Strengthens responsibility

Slide 5

Alternative cross-sectoral models: one size does not fit all Prudential and Conduct-of-Business supervision coordinated? yes no “One Peak” Singapore, Ireland, Czech Republic, Slovakia yes “Twin Peaks” The Netherlands Integrated with Central Bank? “FSA” UK, Japan, Canada Scandinavia, Belgium and more “Three Peaks” Australia Germany, Austria no

Slide 6

Outline 1. What decides the structure of money related supervision? Global pattern towards incorporated supervision Advantages of coordinated supervision Alternative cross-sectoral models: one size does not fit every one of the 2. Why did The Netherlands change, and how? Foundation Steps towards the new structure The Twin Peaks model: merger and rearrangement What have we fulfilled in this way? Early encounters First results

Slide 7

2. Foundation Need for change: Increasing requests on supervisor’s viability and responsibility Key thought (1): Interwoven money related part (items and organizations) Key thought (2): Concentrated monetary division Path reliance: Central Bank with built up notoriety broad budgetary area and supervisory ability independent managerial power

Slide 8

2. Steps towards the new system Removal of boundaries to money related combinations (1990) Council of Financial Supervisors set up (1999) New supervisory structure: foundation AFM (2002) Merger in the middle of DNB and PVK (2004)

Slide 9

2. Supervisory scene before merger DNB-PVK and foundation AFM Sectoral Systemic Prudential Conduct of business Not commonplace securities Typical securities Per area Cross part Per segment Cross segment Credit organizations Mutual stores DNB RFT DNB RFT STE Insurance organizations Pension reserves PVK Securities firms STE

Slide 10

Systemic Prudential Conduct of business Per segment Cross division Per segment Cross segment Credit establishments Mutual trusts DNB AFM Insurance organizations Pension stores Securities firms 2. Supervisory scene after merger DNB-PVK and foundation AFM Functional

Slide 11

2. The Twin Peaks model Before 2004 DNB (banks, speculation firms) Conduct supervision Prudential supervision Lender Of Last Resort Systemic Stability PVK (safety net providers, benefits stores) Conduct supervision Prudential supervision STE/AFM (securities firms,exchanges) Conduct supervision Prudential supervision DNB AFM Prudential Supervision Market Conduct Supervision Conduct-of-Business Supervision After 2004 Systemic Stability Lender Of Last Resort

Slide 12

2. Merger and inward rearrangement obliged over 2 years April 2004 Dec 2002 June 2003 stage 4 12 months stage 1 6 months stage 3 5 months Oct 2003 stage 2 4 months Strategy: behind the reconciliation Planning: Integration process Implementation: from day 1 Completion: full combination Formulate technique and rationale behind joining Identify cooperative energy targets Determine principle new methods of operation Develop criteria for the usage procedure Develop new fundamental hierarchical model Implement authoritative structure and procedures Monitor collaborations and expense investment funds Develop arrangement of activity for stage 4 Implement hierarchical structure and procedures Monitor cooperative energies and utilization substitution approach Resolve remarkable issues Develop definite structure of authoritative model Identify and execute speedy wins Develop wide usage arranging Determine checking parameters and procedure for observing

Slide 13

Outline 1. What decides the structure of money related supervision? Worldwide pattern towards coordinated supervision Advantages of incorporated supervision Alternative cross-sectoral models: one size does not fit every one of the 2. Why did The Netherlands change, and how? Foundation Steps towards the new structure The Twin Peaks model: merger and rearrangement What have we achieved in this way? Early encounters First results

Slide 14

3. Early e xperiences Increase in adequacy and effectiveness of supervision Better perspective of general budgetary security dangers Simultaneous joining/revamping demonstrated productive Institute particular work assention demonstrated reasonable Employees need time to change

Slide 15

3. To start with results IMF FSAP 2004 Palmnet FIRM FTK Vision on Supervision 2006-2010 More hazard situated and straightforward supervisory system

Slide 16

Wrap-up Three recommendations: Supervisory structures are made-to-quantify Twin Peaks is ideal model for The Netherlands Because of supervisory cover, DNB and AFM need to collaborate nearly

Slide 18

Towards an incorporated boss: encounters from The Netherlands Renã© Geskes Head Conduct of Business Supervision Authority for the Financial Markets Washington D.C., 6 June 2006

Slide 19

Agenda Covenant DNB and AFM Supervision in real life: how can it work? Regulation, approach and residential and worldwide interviews Coordination on top level Overlap in supervision

Slide 20

Covenant DNB and AFM The new contract between the AFM and the DNB was consented to in 2004 Arrangement about Licensing procedure Investigations Regulatory measures Information trade Illegal money related foundations and how to abstain from getting in each other’s way

Slide 21

Covenant DNB and AFM Functional division of supervisory obligations, recognizing general, business sector conduct and prudential parts of business and how to abstain from getting in each other’s way General parts of operations Organizational structure, method, reporting lines, fitting administration and interior (ICT) controls Market conduct-particular parts of operations Client organization, partition of benefits, grievance taking care of, customer relations and supplying data to (forthcoming) customers, Chinese dividers, insider managing, value gear and irreconcilable situation and consistence Prudential parts of operations Solvency hazard administration (credit-, market-, operational-, liquidity-and protection hazard), budgetary sureties, capital and extensive presentation reporting and reasonable administration in outsourcing exercises

Slide 22

Covenant DNB and AFM credit establishments and back up plans securities establishments and aggregate venture plans General parts of operations AFM DNB Market conduct-particular parts of operations AFM DNB Prudential parts of operations

Slide 23

Agenda Covenant DNB and AFM Supervision in real life: how can it work? Regulation, strategy and household and universal counsels Coordination on top level Overlap in supervision

Slide 24

Supervision in real life: permitting DNB (prudential) Authorizes banks and insurance agencies Opinion on: fit and respectability of directors operational administration (counting AO/IC) Sharing of data AFM (Market Conduct) Authorizes securities organizations and aggregate venture plans

Slide 25

Supervision in real life: Investigations Planned examinations Sharing of arranging and interval reports (every quarter) Prior to examination demand for significant data Special wishes must be tended to! In the event that associated fizzling falls in field with other controller: data demand! Impromptu examinations Notification of other controller Reporting Joint reporting or offering of results to due recognition of statutory mystery procurements

Slide 26

Supervision in real life: Information trade Both directors must, either in response to popular demand or on their won activity, trade data on establishments under their watch! All information which administered substances are obliged to supply (standard legitimate commitments) Examples: yearly articulations, administration letters, auditor’s reports Exchange without notice to regulated element Standard data Is particular. Warning of trade of such data unless undesirable in light of a legitimate concern for a continuous examination or different circumstances Other data

Slide 27

Supervision in real life: Supervisory measures General measures Can be taken self-governingly by every administrator after – if conceivable - meeting of the other chief (unless outlandish) “Radical’ measures Power is restricted to approving boss First – if conceivable – interview of the other director Non-issuing so as to ape boss may start a radical measure a substantiated guidance to the approving boss!!! Approving manager evaluates the counsel against the principals of sound administration – no reality finding!

Slide 28

Supervision in real life: Illegal establishments Covenant applies just as to activities against an organization tha

Recommended
View more...