Harmonization in Prudential Regulation and Supervision

October 24 – 26, 2017ILjubljana, SloveniaICentral Banking

To complement the ongoing learning initiatives in the area of financial stability and macro-prudential policy, we support countries’ efforts to align with international standards in prudential regulation and supervision, including Basel II and III, European capital requirements and European Banking Authority (EBA) guidelines. To an extent, these had been developed as a set of reform measures to strengthen the regulation, supervision and risk management of the banking sector to function on both micro- and macro-prudential levels.

This learning initiative was built on previous CEF programs that took stock of the challenges faced by the banking sector and how supervision practices have kept pace with the deficiencies in financial regulation that were exposed during the crisis.

Recovering and learning lessons from the crisis, central banks and financial supervisory authorities had been taking a series of steps to create stronger, more stable and safer financial systems. The underlying motivation was to ensure that banks and other financial intermediaries could become increasingly resilient to shocks while continuing to support access to credit which is vital to growth and job creation.

Aim of the event was to familiarize participants with newest developments in prudential regulation and supervision, in line with international standards, including Basel II and III, European capital requirements, and EBA guidelines. The workshop also provided a platform for discussion and exchange of practices through a presentation of selected country cases.

Covered topics

The learning initiative looked into the new regulation framework and recent developments in the international and EU regulatory and supervisory environment focusing on the new Basel III, capital requirements, and specific topics of supervisory review.

During the workshop we discussed the following:

  • Banking Union, Single Supervisory and Resolution Mechanisms
  • Basel “3.5” recent developments with respect to credit risk capital requirements
  • Risk-weighted-assets variability stemming from IRB models: the EU and Basel solutions
  • In-house Credit Assessment Systems (ICAS)
  • Stress tests and banks' business model assessments
  • Corporate governance, Supervisory Review and Evaluation Process (SREP), and Internal Capital Adequacy Assessment Process (ICAAP)
  • Organizational issues to support banking supervision

Following the CEF approach, we followed an interactive approach together with  a peer knowledge exchange that maintained an operational focus to support the efforts of practitioners in the region. In our aim in sharing practices in the region for participants to get a better overview of their peers, we discussed experience on the progress towards the application of the Basel accords and EBA guidelines, efforts of strengthening corporate governance.

Target audience

Participants learned about and discuss practices of the application of the latest regulations and directives that were applicable to their countries. The workshop was designed for central bank employees, in particular from supervision departments, and the representatives of financial supervisory authorities. Participants were actively included in the discussion, raising practical questions and offering insight of relevance to their country cases.

Faculty

Tomaž Rotovnik, Bank of Slovenia

Tomaž has been working on systemic supervision and regulation at the Bank of Slovenia since 2002. As a policy-maker, he covers many areas: corporate governance, risk management, SREP-ICAAP and other Pillar 2 issues, and operational risk. He is a regular speaker at various events of the Bank Association of Slovenia and other international seminars and workshops. Tomaž is a member of several European Banking Authority’s working groups, including Internal Governance and Remuneration, Supervisory Disclosure. In the past he has cooperated with the USAID and EBRD on different regulatory consulting projects.

Matej Krumberger, Bank of Slovenia

Matej Krumberger is Director of Banking Supervision Department at the Bank of Slovenia. He has been working for Bank of Slovenia for 25 years, all time working on supervisory issues. Since 2009, he is Director of Banking Supervision Department. During his long lasting banking supervision career, he participated in many international supervision bodies, starting as Slovenian member of Groupe the Contact in 2004. Currently he has been Alternate member to the Slovenian Member of the Supervisory Board - ECB Single Supervisory Mechanism (SSM).

Peter Kupljen, Bank of Slovenia

Peter joined Bank of Slovenia in 2015 to set up bank's Resolution Unit. His current responsibilities lie in establishing resolution plans for banks in Slovenia, cooperation with Single Resolution Board and management of the Deposit Guarantee Scheme. As director of Resolution Unit he is member of Resolution Committee at the European Banking Authority (EBA) and alternate member of Single Resolution Board Plenary meetings. Before joining the central bank, he held various positions in trading and risk management including the Executive Director for Finance and Risk Management at Nova KBM d.d., Slovenia. Peter holds a Masters of Science degree (M.Sc.) in Finance and Banking from University of Maribor, Faculty of Economics and Business. He is also a FRM charterholder.

Simon Jazbec, Bank of Slovenia

Simon is a consultant analyst in the Systemic supervision and regulation department at the Bank of Slovenia. His main areas of interest are stress testing (hybrid bottom-up approach), the development of banks' business model analysis framework, as well as modeling and evaluating other specific risks (credit risk, IRRBB, etc.). Prior to working in the Supervision sector, he worked in the Financial stability department at the Bank of Slovenia with the focus on top-down stress testing and the development of tools for financial stability. Simon holds a degree and PhD in Physics and has experience also in the field of IT and academia.

Marko Bračković, Bank of Slovenia

Marko is a consultant analyst in the Systemic supervision and regulation department at Banka Slovenije. His main areas of interest are stress testing (hybrid bottom-up approach) as well as monitoring non-performing exposures. Prior to working in the Supervision Directorate, he worked at NLB Vita and NLB as a risk analyst specialising in market and credit risks. He holds a Masters degree in Economics and Financial Economics.

Andreja Kopač, Bank of Slovenia

Andreja is a consultant supervisor in Banking Supervision Department at the Bank of Slovenia. Her main area of work is credit risk with a focus on credit risk modeling. She has been developing and implementing the In-house credit Assessment System (ICAS). As a member of an on-site inspections team, she covers assessments of rating systems, IRB models validation and ICAAP reviews. Before joining the Bank Slovenia, Andreja worked as a risk analyst at SKB banka d.d. She holds a Bachelor's Degree in Mathematics and a Master's Degree in Statistics.

Sietse Bracke, National Bank of Belgium

Sietse has been working in the field of prudential policy at the National Bank of Belgium since 2014. His work focuses mainly on credit risk related issues. He is a member of several EBA working groups (Task Force on Model Validations; Sub Group on Credit risk and Task Force on Supervisory Benchmarking), as well as BCBS working groups (Credit Risk Group and Quantitative Impact Study group). In 2016, he was seconded to the BCBS secretariat to work on the “Basel 3.5” impact study.

Partners

This learning initiative was supported by:

Bank of Slovenia National Bank of Belgium Slovenia's Development Cooperation