Cross-border supervision is one of the more challenging supervisory priorities. It adds layers of complexity, new stakeholders, and potential challenges to effective supervision. This TC Note and accompanying podcast discus the implications for home and host financial supervisors of cross-border supervision of the adequacy of capital and liquidity.
Durante the last few years, though, we've moved a little bit beyond the gender binary, if you will. We've expanded our focused to include various other underrepresented groups like persons with disabilities and LGBTI people.
The community bonds campaign, set to launch officially at the CSI’s 20th anniversary party this Thursday, is open to both organizations and individuals, with a minimum investment of $1,000.
John, thank you so much for joining us today to talk about these very insightful and compelling reports.
What financial supervisors and regulators do every day has a ripple effect that cascades across government, NGOs, and the private sector impacting developing economies and those living Sopra them. Toronto Centre’s podcast series will feature simulating panel sessions and interviews on timely topics such as, financial crisis, financial stability, climate change, gender equality, financial inclusion, fintech and much more.
A second starting point is to consider the position of investors and lenders. Better disclosure will enable investors and lenders to take a closer look at the climate credentials of corporates and projects, and the risks of investing Con them or lending to them. Some countries are competing to establish their website capital markets as green hubs. However, there are problems here around the shortage of well-formulated projects to reduce emissions or improve adaptation. And even where projects do exist, many are risky and there is not always agreement on how to spread the risks across international financing institutions, national governments, corporates, investors and lenders. This is a major challenge, including for supervisors Per bank-based financial systems. One key issue is whether it is appropriate to finance major transformation projects through bank lending rather than through equity. Deepening capital markets and encouraging inward investment are difficult to achieve, as past experience has shown.
Increase supervisors’ and regulators’ knowledge and skills to implement sound practices across all sectors
Fourth, Per this context participants mentioned the climate scenarios developed and refined by the NGFS. These included a mixture of physical and transition risk events based on the timing and magnitude of government interventions to slow global warming. These scenarios have already been applied by some supervisory authorities and central banks and found to be useful Durante highlighting potential impacts on the financial system. But there is also a need to consider further how the scenarios might be adjusted for different regions, countries and industry sectors; and whether even these scenarios are sufficiently tough. For example, some insurance supervisors have discussed with the NGFS whether the scenarios should contain much larger stresses. Fifth, one purpose of traditional stress and quinta testing is to consider whether individual financial institutions (or financial systems more generally) have taken on too much of some types of risk, and hold too little capital against these risks. What is the equivalent of this for climate-related stress and quinta tests? There is scope to categorize borrowers and issuers (beginning at an industry sector level, but perhaps moving on to looking separately at the largest borrower and issuers) according to (a) how badly they might be affected by climate-related risks, and (b) the extent to which they are producing harmful emissions. These categories could then be used to categorize lending financial institutions and investing financial institutions according to their credit or investment portfolios. Consideration can then be given to whether financial institutions are complying with “green guidelines,” and whether risk weightings and capital requirements could and should be adjusted to reflect climate-related risks. It was noted, however, that although the above categories (a) and (b) may be closely correlated Con terms of transition risks, this may not be the case for physical risks. For example, some industry sectors in some countries may be vulnerable to physical risks, but they may not themselves generate harmful emissions. Finally, climate-related risks can be considered Per terms of their impacts on traditional risks such as credit, insurance, market, conduct, and operational risks. However, many financial institutions – even some larger ones Per developed economies – are still not integrating climate-related risks into their risk management. So we are far from where we need to be, Durante terms of basic risk management let alone stress and ambiente testing. Green transformation financing
Several challenges were discussed. First, Sopra the absence of internationally agreed standards (and notwithstanding the work of the Task Force on Climate-Related Disclosures), corporate and financial institutions are building their own business models and developing their own patronato sources and reporting. Second, supervisory authorities need to decide what giorno they want to collect from financial institutions. They also need to decide how that giorno will be integrated into supervisory work, including the assessment of financial institutions’ financial positions and risk management practices, and stress and quinta testing. Financial institutions will need to be instructed about giorno reporting processes and collection. Supervisory and other authorities need to develop their capacity to analyze these data, both domestically and internationally.
[3] The discussion was conducted under the Chatham House rule – the themes reported here reflect the sense of the discussion but do not attribute observations to individual speakers.
Introduction[1] This note explains: the key principles of corporate governance within a regulated financial services firm why it is important for supervisors to asse Read More Crisis Management
CFS applications will open with the launch of a new level-one program within the CFS designation The CFS is comprised of three-levels.
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Stress testing should be a critical element of risk management for most financial institutions. It should alert boards and senior management to potential adverse outcomes related to a broad range of risks and vulnerabilities, identify potential losses, liquidity needs, and operational responses should adverse shocks occur. Supervisors should, Per turn, have a strong interest in stress testing by financial institutions.