1 / 8

Financial Supervision Mechanism

Financial Supervision Mechanism. David Kozelský MA1N0219 Financial Management. Agenda. Norway system in the CR Decision-making status quo Disadventage of the model Adventages of the model Management changes in 2008. Norway system in the CR.

nash-harper
Download Presentation

Financial Supervision Mechanism

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Financial Supervision Mechanism David Kozelský MA1N0219 Financial Management

  2. Agenda • Norway system in the CR • Decision-making status quo • Disadventage of the model • Adventages of the model • Management changes in 2008

  3. Norway system in the CR • In 1986 Norway became the first countryto integrate all supervision activities into one authority (Kredittilsynet). • The model of integrated financial supervision within theframework of the central bank is characterized by integration ofmonetary policy and all supervisory activities • After the revolution (1989) CR has tried to overtake this model – one authority - CNB (Central National Bank), succesfuly accepted in 2006 • This model is characterized bya very close personnel and information connection between the monetary policy and supervisory activities.

  4. Decision-making status quo • Decision-making power within supervisory process is held by supervisory department management. • Monetary policy and supervisory activities are strictly separated. • The supervisory institution is not a part of the central bank, neither another public administration body. • The financing system of the supervisory body has toensure its financial independence so that the institution can recruitqualified employees and acquire up-to-date technical instruments for supervisory activities performance.

  5. Disadventages of the model • Central Bank is an active participant in bond market where thebank exercises at the same time its supervision • risk of damage to reputation of the Central Bank and efforts tomaintain the monetary authority credibility constitute limitations of supervisory activities • risk of conflict of interest between the monetary policy andsupervisory activities of the Central Bank • considerable concentration of power outside direct sphere of the government/parliament activity • conflict between the Central Bank’s independence, necessary for • monetary policy performance

  6. Adventages of the model • Independent financing, separate from state budget • Usage of Central Bank’s infrastructure not only for the monetary policy • Efficient information flows between the banking supervision andmonetary section of the Central Bank • Elimination of risk of communication noise and information rigidity • Compensation for the loss of Central Bank’s competences inprudential supervision with respect to the EU principle of home country supervision • More efficient international cooperation

  7. Management changes in 2008 • Starting from the beginning of 2008, the Central Bank’smanagement changed the sector-oriented organization, to regroup thedepartments internally and create three new departments • FinancialMarket Regulation and Analysis Department • Licensing and EnforcementDepartment • Financial Market Supervision Department

  8. Have a nice day!

More Related