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These updated principles are a broader and more consolidated set of internationally agreed principles. They include guidance for policymakers on the powers and authority necessary for supervisors of financial conglomerates. They also focus on supervisory responsibility and guidance for supervisors on the governance, capital, liquidity and risk management frameworks of financial conglomerates. Importantly, these updated principles are structured in a manner that should facilitate their implementation across jurisdictions and over time. The principles include guidance on 1) the powers and authority necessary for supervisors of financial conglomerates, 2) supervisory responsibility, 3) governance, 4) capital and liquidity, and 5) the risk management frameworks of financial conglomerates.
International Endorsement: Joint Forum member jurisdictions (refer to http://www.bis.org/bcbs/jointforum.htm) and the IMF participated in the development of the principles. A significant public consultation was also conducted (http://www.bis.org/publ/joint27/cacomments.htm) prior to the parent bodies of the Joint Forum (the BCBS, IAIS and IOSCO) approving them in final form.
International Application: These standards were released in September 2012 and have global applicability. Further, the Joint Forum’s immediate intent is to promote their implementation across international jurisdictions over time. For example, the Joint Forum is in the process of discussing how best to do so in the near-term (e.g., volunteer, self-assessments, Joint Forum review of self-assessments, etc) and in the medium-term.
Assessment Methodology
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The assessment methodology was issued by Joint Forum (BCBS, IAIS and IOSCO) on 24 September 2012. From the beginning, the standards were expressly structured in a manner so as to facilitate their implementation. They are therefore already detailed including a clear scope of application, and 29 principles each with implementation criteria and explanatory comments. Further, should near-term implementation work highlight the need for more detailed development to support methods of assessment (e.g., increase assessment detail for certain areas of the principles), the intent of the Joint Forum is to carry out this development as appropriate.