OVERVIEW:
Consolidated supervision is an essential tool of banking
supervision. It signifies a comprehensive approach to
banking supervision which seeks to evaluate the strength of
an entire group, taking into account all the risks which may
affect a bank, regardless of whether these risks are carried
in the books of the bank or related entities.
Most developed countries now have laws and regulations to
ensure that the banks they have licensed can be supervised
on a consolidated basis. Despite these developments there
are still countries which do not practice consolidated
supervision; and within those which do, there exist wide
differences in the scope and intensity of the consolidated
supervision which is practiced.
Against a background of growing international encouragement
to countries to practice consolidated supervision of banks,
the purpose of this training course is to assist
policy-makers and bank supervisors by explaining the
intrinsic merits of consolidated supervision and the
techniques through which it can be implemented.
COURSE CONTENT: Introduction
Basle Committee on Banking Supervision
Core Principles for Effective Bank Supervision
Nature and Importance of Consolidated Supervision of Banks
Consolidated Supervision versus Solo/Individual
Supervision
Corporate Groupings
Parent and Subsidiary Companies
Participation
Banking Groups
Mixed-Activity Groups
Financial Conglomerates
Supervisory Problems with Banks in Groups
Contagion
Group Exposures to Particular Counterparties
Transparency of Legal and Managerial Structures
Quality of Management
Rights of Access to Prudential Information
Moral Hazard
Consolidated Prudential Reports
Scope of Consolidation
Holding Companies
Methods of Consolidation (Accounting Techniques)
Subsidiaries
Participations
Full Consolidation
Pro-rata or Proportionate Consolidation
Equity Accounting
Solo Consolidation
Quantitative Consolidated Supervision
Monitoring Consolidated Prudential Reports on a
Quantitative Basis
Large Exposures
Connected Exposures
Market Risks
Aggregation Plus
Deduction Plus
Liquidity
Qualitative Consolidated Supervision
Banking Groups
Mixed Activity Groups
Supervision of International Bank Groups
Minimum Standards
TRAINING COURSE METHODOLOGY:
The training course uses traditional tried and tested
techniques which include instructor led lectures, training
videos and simulations. Presentations will be integrated
with interactive group discussions. Case studies will ensure
the firm basis of the training course in recent
international practical experience, current regulatory and
industry developments, and likely future trends and
expectations.
Workshop exercises, breaking up the group into smaller
units, will give practical experience in Consolidated
Supervision and simulate real-life examples. Comprehensive
training course notes will be provided for future reference.
