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Detailed list of topics

Preconditions for Effective Banking Supervision
(1)    Organization and Structure of Supervisory Agency
(2)    Operational Independence

    Resources: Staffing, Funding and Technology
    Accountability to Public (Annual Report)
    Protection from Personal and Institutional Liability
    Conflicts of Interest
    Review of Agency Actions

(3)    General Legal Authority

    Authority to Issue Regulations or Prudential Measures
    Authority to Delegate
    Other General Authority

(4)    Sharing Information With Other Relevant Supervisory Agencies; Confidentiality of Information

Licensing Process and Approval for Changes in Structure
(5)    Definition of Entities to be Licensed and Supervised as Banks

    Banking Activities Defined
    Control of the Word "Bank"

(6)    Bank Licensing

    Authority to Establish and Impose Clear, Objective Licensing Criteria
    Coordination Between the Licensing Authority and Supervisory Authority, Where They Are Different
    Licensing Process

    Application Procedures
    Proposed Ownership Structure

    Assessment of Direct and Indirect Controlling and Major Shareholders
    Source of Initial Capital to be Invested
    Bank As Part of a Larger Organization

    Proposed Directors and Senior Management

    Fit and Proper Test
    Background Checks
    Supervisory Notification Prior to Subsequent Changes
    Authority to Prevent Subsequent Changes

    Proposed Operating Plan and Internal Controls

    Market Area
    Business Strategy
    Business Organization
    Internal Controls
    Corporate Governance

    Projected Financial Condition

    Review of Pro Forma Financial Statements and Projections
    Basis for Projections
    Financial Capacity of Shareholders

    Foreign Bank as Proposed Owner

    Application of Basle "Minimum Standards for the supervision of international banking      groups and their cross-border establishments"
    Approval of Home Country Supervisor
    Assessment of Supervisory Practices of the Home Country Supervisor

    Authority to Reject Applications

    Licensing Criteria Not Met
    Presence of a Corporate Affiliation or Structure That Would Hinder Effective Supervision
    Inadequate Access to Head Office Management and Information
    Failure to Obtain Approval of Home Country Supervisor

(7)    Significant Ownership or Controlling Interests in Existing Banks/Bank Holding Companies

    Prior Notification to Supervisor Required
    Prior Approval of Supervisor Required
    Covered Transfers Defined
    Supervisor's Authority to Review
    Supervisor's Authority to Block or Impose Conditions on the Investment, or Take Other Appropriate Action

(8)    Major Acquisitions or Investments by Banks

    Prior Notification to Supervisor Required
    Prior Approval of Supervisor Required
    Covered Acquisitions or Investments Defined
    Supervisor's Authority to Review
    Supervisor's Authority to Reject or Impose Conditions on the Acquisition or Investment, or Take Other       Appropriate Action

General Corporate Organization and Operation of Banks

(9)    General Corporate Organization and Operation of Banks

Capital and Assets: Authorized Activities and Related Prudential Regulations and Requirements

(10)    Capital Adequacy

    Capital Components Defined
    Minimum Capital Requirements
    Basis for Application: Consolidated or Non-Consolidated
    Capital Requirements for Internationally Active Banks
    Authority to Require Higher Than Minimum Capital

    Off-Balance Sheet Activities
    Contingent Risks

    Authority to Review and Condition or Prohibit Capital Distributions or Reductions

(11)    Loans and Investments, Including Asset Quality, Concentrations, Provisions and Reserves

    Functional Governance

    Written Policies
    Board's Periodic Review and Approval of Policies
    Loan/Investment Approval and Administration Processes
    Loan/Investment Documentation
    Periodic Reviews of Asset Quality; Asset Quality Classifications; Documentation
    Periodic Reviews of Provisions and Reserves; Documentation

    Underwriting Criteria

    Prudent and Objective
    Exceptions

    Loan/Investment Administration

    Generally
    Assessment of Guarantors
    Assessment of Collateral
    Administration of Risk Concentrations
    Administration of Problem Assets
    Collection of Past Due Loans
    Non-accrual Status
    Troubled Debt Restructuring

    Administration of Provisions and Reserves

    Reserve Calculations
    Charge-Offs and Recoveries

    Concentrations

    Legal or Supervisory Limitations on Exposures to Single or Related Borrowers
    Exceptions and Exception Procedures
    Related Borrowers Defined
    Other Risk Concentrations

(12)    Connected Lending and Other Connected Transactions

    Legal or Supervisory Limitations on Connected Lending

    Limits
    Underwriting Standards: Arms'-Length
    Approval Process
    Deduction from Capital Required
    Collateral Required
    Connected Borrowers Defined
    Supervisory Discretion to Determine Connectedness

    Legal or Supervisory Limitations on Other Connected Transactions

    Limits
    Standards: Arms'-Length
    Approval Process
    Connected Parties Defined
    Supervisory Discretion to Determine Connectedness

    Functional Governance

    Written Policies
    Board's Periodic Review and Approval of Policies
    Administration of Connected Lending and Other Connected Transactions
    Documentation

(13)    Other Assets

    Cash Accounts
    Due From Banks

    Limitations on Interbank Liabilities
    Funds Collection

    Other Real Estate Owned
    Bank Premises and Other Equipment

Liabilities: Authorized Activities and Related Prudential Regulations and Requirements

(14)    Deposits

    Authorized Deposit-takings
    Interest on Deposits
    Related Fees and Service Charges
    Reserve Requirements

(15)    Borrowed Funds

    Advances From the Central Bank
    Discounts to the Central Bank
    Repurchase Transactions

(16)    Money Laundering and Prevention of Bank Use by Criminal Elements

    "Know-Your-Customer" Policies

    Customer Identification
    Recordkeeping
    Reporting Suspicious Transactions

    Promotion of High Ethical and Professional Standards
    Detection and Avoidance of Fraud in Banks

Off-Balance Sheet Activities

(17)    Off-Balance Sheet Activities

Corporate Governance, Risk Management Processes, and Internal Controls

(18)    Corporate Governance, Risk Management Processes, and Internal Controls

    General Corporate Governance
    Risk Management Processes Generally

    Functional Governance

    Written Policies
    Board's Periodic Review and Approval of Policies
    Administration of Risks Undertaken
    Provisions or Reserves
    Documentation

    Supervisor's Authority to Limit Risk Exposures     Supervisor's Authority to Impose a Capital Charge

    Internal Controls

    Written Controls and Procedures

    Delegating Authority or Responsibility
    Functional Separation
    Reconciliation
    Safeguarding Assets

    Board's Periodic Review and Approval
    Audit Procedures
    Correction of Weaknesses
    Documentation

    Internal and External Audit

    Independence
    Notice to Supervisor on Change or Dismissal

    Compliance with Laws and Regulations

Methods of Ongoing Banking Supervision

(19)    Off-Site Surveillance, Supervisory Reporting and Reporting Practices

    Prudential Reports and Statistical Returns Collected From Banks

    Financial Statements
    Supporting Schedules
    Application of Accounting Principles as Instructed by Supervisor
    Form of Reports (Must Enable Comparison)

    Scope and Frequency of Reporting

    Authority to Determine Scope and Frequency
    Reporting Triggers (Interval and Event Reporting Required)

    Information Collected From Affiliated Non-Bank Entities
    Assessment of Adequacy of Reports

    Management Responsibility
    Role of External Auditors
    Supervisory Assessment of Nature and Adequacy of Audit Work

    Review of Publicly-Available Information
    Assessment of Recordkeeping Practices
    Use in Identifying Problems in Individual Banks; Banking Sector
    Use in On-Site Examination Planning

(20)    On-site Supervision

    Authority to Conduct On-Site Supervision
    Method of On-Site Supervision

    Examiners
    Use of External Auditors

    Qualifications of Auditors
    Supervisor's Authority to Veto Auditors
    Obligations to Inform Supervisor
    Protection From Liability for Disclosing Information to Supervisor

    Independent Verification of Adequate Corporate Governance and Reliability of Information Provided by Banks
    Guidelines on Frequency and Scope of On-Site Examinations
    Other Supervisory Contacts with Bank Management

Information Requirements

(21)    Consolidated Supervision of Banking Groups

    Authority to Review Banking and Non-Banking Activities
    Authority to Review Domestic and Foreign Activities
    Coordination With Other Supervisory Agencies

(22)    Public Disclosures Required; Disclosure Practices

Cross-border Banking

(23)    Licensing Process

    Application Procedures
    Obtaining Home Country Approval Prior to Licensing

(24)    Global Consolidated Supervision

    Global Application of and Assessment of Compliance with Prudential Norms
    Assessment of Head Office Oversight of Branches, Joint Ventures and Subsidiaries
    Contact and Information Exchanges with Other Supervisors
    Bilateral Arrangements for Ongoing Information Sharing
    Supervisory Action in Absence of Information Sharing Arrangements
    Nature and Extent of Host Country Supervision
    Supervisory Response to Inadequate Host Country Supervision
    Standards for Local Operations of Foreign Banks

    Applicable Standards of the Host Country
    Consolidated Supervision by Home Country Supervisor

Formal Powers of Supervisors

(25)    Formal Powers of Supervisors

    Authority to Require Corrective Actions

    Authority to Require Corrective Action

    Authority to Require Increase in Capital
    Authority to Restrict Current Activities
    Authority to Withhold Approval for New Activities or Acquisitions
    Authority to Restrict or Suspend Dividends or Other Payments to Shareholders
    Authority to Restrict Asset Transfers
    Authority to Prohibit Purchases of Bank's Own Shares
    Authority to Require Replacement of Directors or Managers
    Authority to Restrict Powers of Shareholders, Directors or Managers
    Authority to Bar Individuals from Engaging in the Business of Banking
    Authority to Impose Fines Against Banks or Individuals
    Authority to Appoint a Conservator
    Authority to Make Criminal Referrals

    Grounds for Exercising Corrective Action Authority
    Parties Against Whom Formal Actions May Be Taken
    Supervisory Follow-up

    Process for Requiring Corrective Actions, Including Judicial or Other Reviews of the Supervisor's Exercise of Formal Powers

Lender of Last Resort

(26)    Lender of Last Resort

Bank Rehabilitation and Exit Procedures

(27)    Triggering Events/Grounds

    License Revocation

    Effect of License Revocation

    On the Bank Generally
    On Bank Owners
    On Depositors and Other Creditors

    Insolvency Determination

(28)    Appointment, Powers and Termination of Provisional Administrator; Procedures for Rehabilitation

    Authority to Appoint
    Qualifications
    Operations

    Responsibilities and Objectives
    Operational Independence

    Accountability to Public (Annual Report)
    Protection from Personal and Institutional Liability
    Conflicts of Interest
    Review of Actions

    Oversight of Conservator/Provisional Administrator/Receiver
    Resources of Conservator/Provisional Administrator/Receiver
    General Legal Authority
    Sharing Information With Other Relevant Supervisory Agencies
    Confidentiality of Information

    Termination of Provisional Administrator

(29)    Appointment, Powers and Termination of Receiver; Procedures for Liquidation

    Entities Involved; Roles

    Bank Supervisor
    Lender of Last Resort
    Deposit Insurer
    Receiver
    Creditors
    Shareholders
    Judicial Involvement or Review

    Achieving Physical Control of Assets and Liabilities; Books and Records
    Determination of Claims of Depositors; Other Creditors
    Satisfaction of Claims of Depositors; Other Creditors
    Preservation and Maximization of Asset Value
    Asset Dispositions
    Other Powers

Deposit Insurance

(30)    Operations of Insurer; Funding and Premiums

    Insurer's Responsibilities and Objectives
    Operational Independence

    Accountability to Public or Participating Banks (Annual Report)
    Protection from Personal and Institutional Liability
    Conflicts of Interest
    Review of Agency Actions

    Resources: Staffing, Funding and Technology

    Funding Through Premiums or Assessments
    Borrowing Authority
    Tax Treatment of Insurer's Earned Income

    General Legal Authority
    Sharing Information With Other Relevant Supervisory Agencies
    Confidentiality of Information

(31)    Ceiling on Deposits Covered

    Limits on Amount
    Applying Limits: Accountholders in the Same Right and Capacity
    Treatment of Fiduciary Accounts
    Availability to Non-Host Country Banks

(32)    Authority to Use Insurance Funds (Such As Insured Deposit Payouts, Open Bank Assistance, Assisted Mergers, Purchase and Assumption Transactions, Guarantees and Indemnities)

    Authorized Investments
    Insured Deposit Payouts
    Excess Payouts (e.g., payouts in excess of the insured deposit limit)
    Receiver Funding
    Purchase of Bank Assets From Conservators or Receivers
    Temporary Assistance to Failing Banks
    Recapitalization or Bailout of Banks of Systemic Importance

(33)    Termination of Insurance

    Authority to Terminate Insurance
    Grounds
    Process forInsurance Termination; Reviewability
    Effect of Insurance Termination

(34)    Reviewability of Insurer's Actions

Generally Applicable Definitions

(35)    Generally Applicable Definitions

 

 
Note: Unofficial translation. See disclaimer.
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