Risk Management and Control - International Finance

Risk Management and Control

Strict capital and liquidity standards for the Basel-3 system should be accompanied by more effective risk management and control, especially given the international environment and rapidly developing financial innovations. To this end, the Basel Committee has developed and published new standards aimed at more effective risk management and strengthening of control activities of all bank structures.

The Banking Supervision Committee conducts a comprehensive analysis and periodically reviews the results of the use of its recommendations by central banks and other financial institutions. The recommendations of the BCBN are also used in the SPS and in other standards-setting bodies. They contribute to the formation of common standards that countries can use to reform their national dispute resolution regimes, make them more compatible with each other and transparent.

Examination of operational risks. Regulation of capital adequacy requires a gradual convergence of the operational risk discipline to a narrower group of effective risk management and measurement methods. In December 2010, the BCBN issued two advisory documents on operational risk. Accordingly, the committee updated the current "Operational Risk Control Manual" from 2003. " based on new industry best practices and experience in three areas: general management, risk management and disclosure. The second consultative document ("Operational Risk - Guidelines Based on Advanced Measurement Techniques") covers management issues, data and modeling technology. It makes it possible to reduce the impact of insurance risk in modeling operational risk, which presents potential advantages and reduces the shortcomings of insurance in operational risk.

Improving the activities of the supervisory colleges. The general situation with the financial crisis is an extremely unfavorable phenomenon in international finance, which has made it important to increase the work of the supervisory boards to better support the effective control of international banking groups. Based on the crisis experience, the Basel Committee formulated a number of principles that are aimed at developing and strengthening the work of the colleges. Document Principles of Good Practice for the Work of Observant Colleges complements the extensive Guidelines, issued by the Basel Committee on Foreign Cooperation and Information Exchange. These principles are designed to provide greater flexibility needed to implement the manual for a wide range of banks in different jurisdictions, as well as more thorough operational control.

Improving corporate governance. The BKNB in ​​October 2010 updated the document Corporate Governance Guide (before this last issue was released in 2006). New document Principles of Enhancing Corporate Governance establishes revised norms of best practices in key areas of banking and requires the provision of a regular monitoring evaluation of bank corporate governance practices and their compliance with the principles of the Basel Committee.

In August 2010, the Basel Committee published the final version of the document, "Microfinance Activities and Core Principles for Effective Banking Control," which provides guidance on a number of practical practices in regulation and control in the microfinance sector in the activity of banks.

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