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Aligning Financial Supervisory Structures with Country Needs

Agenda (selected)

June 5th, 2006

This event takes place in the World Bank J Building, located at corner of 18th Street and Pennsylvania Avenue, NW, Washington, lower level, Auditorium JB1-080

 

08:00-09:00  Registration and Breakfast. Lobby outside of auditorium.

09:00  Welcome

 

Session 1: Choosing an Appropriate Regulatory Structure

Moderator: Alexander Fleming, Sector Manager, Finance and Private Sector Unit, World Bank Institute

09:00-10:30  Overview of the Alternative Regulatory Structures, David T. Llewellyn, Professor of Money and Banking, Department of Economics, and Chairman, Banking Centre, Loughborough University, UK. Download Overview of Regulatory Structures Paper here. This paper will provide a systematic overview of the alternative regulatory structures found throughout the world. What are the forces that have driven recent changes in regulatory structures? The presentation will address how conglomeration, regulatory arbitrage, and cost effectiveness have played a role in motivating change. Country experience has proven that there is no single ideal structure. Issues that are most relevant to supervisors in large countries--such as conglomeration--may not be as relevant to smaller countries, where issues such as concentrated ownership, concentrated wealth, and foreign ownership of financial institutions are more critical. What are the strengths and weaknesses of the various structures?

 

10:30-10:45 Coffee

 

10:45-11:30  Updated International Survey of Integrated Financial Supervisors

  • Alexander Fleming, Sector Manager, Finance and Private Sector Unit, World Bank Institute
  • Silvina Vatnick, Lead Financial Economist, Financial Sector, World Bank
  • Diego M. Sourouille, Consultant, Financial Sector, World Bank
  • David T. Llewellyn, Professor of Money and Banking, Department of Economics, and Chairman, Banking Centre, Loughborough University, UK

Over the three years since the Bank last took stock of supervisory architecture around the world, a number of other countries have opted to undertake structural changes in this area. This session will take a global look at the types of architecture adopted by different countries. Then, with reference to a recent survey, it will examine the latest countries to transition to a new model of financial supervision, highlighting features of interest in each. Finally, the session will focus on some issues that have arisen recently in the context of changing architecture, in particular the issue of appropriate governance for supervisory agencies and the role of international institutions in assisting countries with their transition.

 

11:30-12:00  Effective Supervisory Structures for Small, Open Economies, (Download the paper here). Marc Quintyn, Head of Technical Assistance for Africa Region, Monetary and Financial Systems Department, International Montary Fund; and Michael Taylor, Head, Banking Policy, Hong Kong Monetary Authority. Small, open economies aim to grow their financial systems, but often with limited resources. Policymakers and supervisors are working to promote diversified, stable financial systems, and to provide a healthy environment for foreign investment. This paper will discuss the experiences of several small countries in Africa that have restructured their financial supervisors. It will explore the motives and the market context in which these transformations have taken place, and assess the effectiveness of the newly formed supervisors.

 

12:00-12:30  Question and Answer

 

12:30-14:00  Lunch. Main complex building, 12th floor Gallery, located at 1818 H Street, NW, across the street from conference auditorium. Participants will be escorted there.

Keynote address: Jonathan Fiechter, Deputy Director, Monetary and Financial Systems Department, International Monetary Fund

 

Session 2: Making the Decision to Change Regulatory Structure: Small Country Considerations

14:00-15:45  Supervisory Models from Small, Open Economies. What are the special challenges facing small, open economies in terms of financial supervision? Panelists will discuss the unique pressures, resource constraints, transition process, and challenges ahead for financial supervisors in small economies.

Moderator: Marc Quintyn, Head of Technical Assistance for Africa Region, Monetary and Financial Systems Department, International Monetary Fund

15:45-16:00  Coffee

 

16:00-17:30  Case Study on Regulatory Structure (Part 1) Written by Jeffrey Carmichael, former Chairman, Australia Prudential Regulation Authority, and President, Carmichael Consulting. A case study based on an actual country will be used to provide a current scenario for analysis. Participants will consider issues such as: concentrated ownership, public sector ownership, foreign ownership, regulatory arbitrage, scarce regulatory resources, political and bureaucratic tensions. Participants will be broken up into small groups to consider the issues and offer a set of options for regulatory structure based on the earlier discussions. Groups will identify and justify their preferred solution for reporting back to the plenary on the next day.

 

17:30-19:00  Cocktail Reception. J Building 5th Floor Atrium, Pennsylvania Avenue side. (This is in the same building as the event, and guests will be escorted upstairs to the cocktail.) All conference participants are welcome to join.

 

June 6th, 2006

This event takes place in the World Bank J Building, located at corner of 18th Street and Pennsylvania Avenue, NW, Washington, lower level, Auditorium JB1-080

08:00-09:00  Breakfast. Lobby outside of auditorium.

 

Session 3: Transition to a New Regulatory Structure

09:00-10:30  Countries at the Early Stages of Transition. Several countries have just initiated the transformation of their financial supervisors. Many are facing similar challenges, such as: building consensus about the appropriate structure; communicating effectively with the institutions and market participants involved; maintaining regulatory effectiveness during the transition process. Supervisors will share perspectives on the first stage of the transition, and their expectations for the next few years.

Moderator: Michael Taylor, Head, Banking Policy, Hong Kong Monetary Authority

Commentator: Pablo Gottret Valdes, Senior Economist, Health, World Bank, and former Superintendente de Pensiones, Valores Y Seguros, Bolivia

 

10:30-11:00  Coffee Break

 

11:30-12:30  Case Study on Transition (Part II) Written by Jeffrey Carmichael. Break-out groups will be reconvened to consider the transitional aspects of the case started on the previous afternoon. Participants will be presented with additional information and will be required to expand their recommendations on structure to include: a realistic timeframe for transition, internal staff structure for any new or changed agencies, staff training, transition of the industry to the new regulatory framework, etc.

 

12:30-14:00  Lunch. Main complex building, 12th floor Gallery, located at 1818 H Street, NW, across the street from conference auditorium. Participants will be escorted there.

Keynote address: Jochen Sanio, President, Bundesanstalt für Finanzdienstleistungsaufsicht, Germany

 

14:00-15:30  Examining the "Twin Peaks" Model in the Netherlands. This session will discuss the background and functionning of the "twin peaks" supervisory model that has recently been adopted in the Netherlands. Presenters from the central bank and the Netherlands Authority for the Financial Markets will address the considerations that drove the restructuring and the experience of putting it into practice.

Moderator: David T. Llewellyn, Professor of Money and Banking, Department of Economics, and Chairman, Banking Centre, Loughborough University, UK

15:30-15:45  Coffee

 

Session 4: Making the Regulatory Structure Effective

Moderator: Jeffrey Carmichael, President, Carmichael Consulting

15:45-16:45  Perspectives from Supervisors Several Years after Transformation. Countries that transformed their supervisory architecture several years ago face new challenges to ensure that integrated structures deliver the synergies that were expected. Panelists will share experiences with promoting risk-based supervision, breaking down silos, and strategically placing staff, improving the quality and flow of information, and other issues.

16:45-17:15  Reporting Back to the Plenary, Lessons Learned from the Simulation. Conference Facilitators. Following the case study exercise, each group will summarize the option that they have selected for regulatory structure in the case country, and the rationale for their choice. The groups would briefly describe the approach that they would take in dealing with the transition. Discussion would follow, and participants would critique the choices and strategies of different groups.

 

17:15-17:30  Conclusions and Adjournment, Jeffrey Carmichael, President, Carmichael Consulting; and David T. Llewellyn, Professor of Money and Banking, Department of Economics, and Chairman, Banking Centre, Loughborough University, UK




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