Title: Regulation and supervision of financial conglomerates : the new groupwide approach and what it means for World Bank operations
Abstract: Financial conglomerates are firms that include multiple financial institutions often regulated by different agencies. The trend toward conglomeration blurs the lines between institutions with different primary regulators and supervisors and so poses challenges to the regulatory and supervisory authorities that watch over financial institutions. The authorities responsible for the different branches of the financial sector often have quite different objectives and use different methodologies. There are three main supervisory concerns: contagion, transparency, and autonomy. In the light of these concerns, the main objectives are to minimize potential contagion within the group, promote transparency of group structure and finances, and promote the accountability of the directors and managers of individual regulated entities. To achieve these objectives, one approach is to regulate and supervise all financial institutions in a group in a consolidated manner. Another approach is to separately regulate and supervise the entities in the group that require it but not regulate or supervise the others. This Note describes the responses being developed in different countries and international forums. The World Bank must take account of these responses in its operations. It can no longer view regulation and supervision of individual financial sectors in isolation.
Publication Year: 1995
Publication Date: 1995-03-31
Language: en
Type: article
Access and Citation
Cited By Count: 2
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot