Integrated Financial Supervision: Experiences in Selected Countries

This paper represents one of the first comparative analyses of experiences of integrated supervision. It discusses how several countries around the world have developed the processes of integrating financial regulation and supervision, and covers numerous relevant technical issues as well as the policy options. It describes the scope of the activities, institutions, responsibilities, and regulatory powers that integrated supervisors are expected to cover. Issues related to the organizational structures and the management of staff resources are also considered. In particular, the paper discusses how the supervisory agencies have dealt with three important aspects: the treatment of financial conglomerates, the risk assessment process, and crisis management. The institutional aspects of financial regulation and supervision are receiving great attention around the world. This interest has increased as several developed and developing countries integrated their specialized regulatory structures during the last few years, sometimes introducing a single financial regulator. The recent literature on financial regulation and supervision reflects the debate on the advantages and disadvantages of integrating the supervision of banks, insurance, securities, and other financial sector activities. It also recognizes the importance of issues and risks associated with the processes of implementing supervisory integration. The experiences of those countries that have already integrated their financial supervisory structures provide insights that could be useful for other countries that are studying a move toward integration. This paper (a previous version of which was presented at the Latin American Regional Financial Forum in October 2002) represents one of the first comparative analyses of experiences of integrated supervision. It discusses how several countries around the world have developed the processes of integrating financial regulation and supervision, and covers numerous relevant technical issues as well as the policy options. It describes the scope of the activities, institutions, responsibilities, and regulatory powers that integrated supervisors are expected to cover. Issues related to the organizational structures and the management of staff resources are also considered. In particular, the paper discusses how the supervisory agencies have dealt with three important aspects: the treatment of financial conglomerates, the risk assessment process, and crisis man