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Financial regulation is a broad set of policies that apply to the financial sector in most jurisdictions, justified by two main features of finance: systemic risk, which implies that the failure of financial firms involves public interest considerations; and information asymmetry, which justifies curbs on freedom of contract in selected areas of financial services, particularly those that involve retail clients and/or Principal–agent problems. An integral part of financial regulation is the supervision of designated financial firms and markets by specialized authorities such as securities commissions and bank supervisors.
Banking regulation and supervision refers to a form of financial regulation which subjects banks to certain requirements, restrictions and guidelines, enforced by a financial regulatory authority generally referred to as banking supervisor, with semantic variations across jurisdictions. By and large, banking regulation and supervision aims at ensuring that banks are safe and sound and at fostering market transparency between banks and the individuals and corporations with whom they conduct business.
Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. It is now extended and partially superseded by Basel III.
The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten (G10) countries in 1974. The committee expanded its membership in 2009 and then again in 2014. As of 2019, the BCBS has 45 members from 28 jurisdictions, consisting of central banks and authorities with responsibility of banking regulation.
The International Organization of Securities Commissions (IOSCO) is an association of organizations that regulate the world's securities and futures markets. Members are typically primary securities and/or futures regulators in a national jurisdiction or the main financial regulator from each country. Its mandate is to:
The Netherlands Authority for the Financial Markets is the financial services regulatory authority for the Netherlands. Its role is comparable to the role of the SEC in the United States.
The European Insurance and Occupational Pensions Authority (EIOPA) is a European Union financial regulatory agency. It was established in 2011 under Regulation (EU) No 1094/2010.
The Guernsey Financial Services Commission is the regulatory body for the finance sector in the Bailiwick of Guernsey. It supervises and regulates over 2,000 licensees from within the banking, fiduciary, investment and insurance sectors in accordance with standards set by international bodies such as the Basel Committee for Banking Supervisors, the International Association of Insurance Supervisors, the International Organisation of Securities Commissions and the Financial Action Task Force on Money Laundering.
The Committee of European Banking Supervisors (CEBS) was an independent advisory group on banking supervision in the European Union (EU), active from its establishment in 2004 to its replacement on 1 January 2011 by the European Banking Authority (EBA) which took over all its tasks and responsibilities following Regulation (EC) No. 1093/2010 of the European Parliament and of the Council of 24 November 2010.
The International Association of Insurance Supervisors (IAIS) is a membership organization of insurance supervisors from more than 200 jurisdictions, constituting 97% of the world's insurance premiums. It is the international standards-setting body for the insurance sector. The IAIS was established in 1994 and operates as a verein, a type of non-profit organisation under Swiss Civil Law.
A securities commission, securities regulator or capital market authority is a government department or agency responsible for financial regulation of securities products within a particular country. Its powers and responsibilities vary greatly from country to country, but generally cover the setting of rules as well as enforcing them for financial intermediaries and stock exchanges.
The National Securities Market Commission (CNMV) is the Spanish government agency responsible for the financial regulation of the securities markets in Spain. It is an independent agency that falls under the Ministry of Economy.
The Financial Services Board (FSB) was the government of South Africa's financial regulatory agency responsible for the non-banking financial services industry in South Africa from 1990 to 2018. On 1 April 2018, its responsibilities were split into two new agencies the Financial Sector Conduct Authority (FSCA) for conduct regulation and the Prudential Authority (PA) for prudential regulation.
Macroprudential regulation is the approach to financial regulation that aims to mitigate risk to the financial system as a whole. After the 2007–2008 financial crisis, there has been a growing consensus among policymakers and economic researchers about the need to re-orient the regulatory framework towards a macroprudential perspective.
Basel III is the third Basel Accord, a framework that sets international standards for bank capital adequacy, stress testing, and liquidity requirements. Augmenting and superseding parts of the Basel II standards, it was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007–08. It is intended to strengthen bank capital requirements by increasing minimum capital requirements, holdings of high quality liquid assets, and decreasing bank leverage.
The European Banking Authority (EBA) is a regulatory agency of the European Union headquartered in La Défense, Île-de-France. Its activities include conducting stress tests on European banks to increase transparency in the European financial system and identifying weaknesses in banks' capital structures.
The Public Interest Oversight Board (PIOB) is an international body that oversees the International Federation of Accountants (IFAC) and seeks to improve the quality and public interest focus of the IFAC standards in the areas of audit, education, and ethics.
A systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution whose failure might trigger a financial crisis. They are colloquially referred to as "too big to fail".
The International Association of Deposit Insurers (IADI) was formed on 6 May 2002 with the purpose of sharing deposit insurance expertise with the world and contributing to the stability of financial systems as the standard setter for deposit insurance with a global and expanding membership.
A financial regulatory authority or financial supervisory authority is a public authority whose role is to ensure the proper implementation of financial regulation within its scope of responsibility.
References
- ↑ Bank of International Settlements - Joint Forum history
- ↑ "Joint Forum". Bank for International Settlements. November 16, 2006 – via www.bis.org.