IMF/Bank of Israel Financial Sector Conference ISRAEL’S CAPITAL MARKET REFORMS: SUPERVISORY APPROACHES AND MANAGING CHANGE Presentation on Approaches in: Canada, Singapore & Australia By John Palmer Chairman of the Toronto International Leadership Centre for Financial Sector Supervision
IMF/Bank of Israel Financial Sector Conference. ISRAEL’S CAPITAL MARKET REFORMS: SUPERVISORY APPROACHES AND MANAGING CHANGE Presentation on Approaches in: Canada, Singapore & Australia By John Palmer Chairman of the Toronto International Leadership Centre for Financial Sector Supervision. - PowerPoint PPT Presentation
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IMF/Bank of IsraelFinancial Sector Conference
ISRAEL’S CAPITAL MARKET REFORMS:SUPERVISORY APPROACHES AND MANAGING CHANGE
Presentation on Approaches in:Canada, Singapore & Australia
By John PalmerChairman of the Toronto International Leadership Centre for Financial
Sector Supervision
Supervisory Approaches in Canada, Singapore & Australia
Issues to explore:
• How financial supervision has been integrated
• Relationship with Central Bank
Advantages of Integrated Financial Supervision
• Better overview/understanding of financial system and system-wide risks
• Cross-fertilization of knowledge• More efficient use of scarce functional
specialist resources/technical experts
Advantages of Integrated Financial Supervision (2)
• May become too powerful (a bully)• May affect quality of cooperation with solo
regulators
Separating Integrated Supervisor from Central Bank
• Most integrated supervisors have been separated from central bank
• Reason is to separate regulation/supervision from financial support and avoid moral hazard
• Danger is that it may weaken ability of central bank to maintain financial stability
Separating Integrated Supervisor from Central Bank (2)
• If separated from Central Bank, surveillance of financial sector could weaken
• Jury still out on effectiveness of Integrated Regulator/Central Bank information-sharing mechanisms
Models of Integrated Financial Supervision: OSFI
• OSFI separate from Central Bank• Coordination mechanism (FISC)• Supports Bank’s macro-economic
surveillance• Responsible for prudential
supervision/regulation• Market conduct supervision a provincial
responsibility
Models of Integrated Financial Supervision: OSFI (2)
Supervises:• All Banks • National (federal) deposit-taking institutions• National Insurance companies (life and general)• National private pension funds
Does not supervise:• Securities firms• Financial markets• Financial intermediaries• Provincial entities
Evaluation of the OSFI ModelAdvantages• Gained most of the advantages of