Operational Issues in Consolidated, Cross-border, and Risk-based Supervision

Workshop: April 11 – 13, 2018ILjubljana, SloveniaICentral Banking

This initiative was part of our efforts to support capacity development in the area of banking supervision. We support countries’ efforts to align with international standards and guidelines in prudential regulation and supervision.

Due to the internationalization of banks operations the supervisors need to take into account the total activities abroad and to successfully examine their soundness. The consolidation of the banking supervision should not only incorporate banks’ foreign branches, but also those of banks’ wholly-owned and majority-owned foreign subsidiaries. Foreign subsidiaries, participations, and joint ventures are to be observed. Those are independent from their banks and are subject to another legal environment.

Risk-based supervision has become a very important aspect in the supervision of banks. We can now also closely examine lessons learned since the establishment of the Single Supervisory Mechanism and its risk-based approach, aiming at assessing risks and risk management processes at credit institutions. This implies a comprehensive program of continuous analysis of the key risks at all credit institutions through on-going supervision and on-site inspections. In the workshop we will discuss in-depth investigations of risks, risk controls and governance, with a pre-defined scope and time frame at the premises of a credit institution.

Within the scope of risk-based supervision, the authorities are focusing aspects such as evaluating banks’ own credit risk management, stress testing and risk-based internal audit, home-host cooperation. Supervisory processes are to be reviewed in order to function effectively. To evaluate the requirements imposed to banks and improving their governance and risk-management, the supervisors themselves need a framework for assessment.

What was it about?

Topics discussed at the workshop:

  • Scope of the SSM and Banking Union
  • Work in supervisory colleges on the case of SSM Joint Supervisory Teams
  • Organizational aspects and framework for performance of on-site inspections
  • Bottom-up stress testing framework
  • Bank business model assessment tool
  • Banking legislation CRR / CRD IV
  • Supervisory expectations on ICAAP and ILAAP
  • Supervisory approach and assessment of internal capital and liquidity adequacy assessment processes

Who was it for?

The seminar was designed for employees from banking regulation and supervision departments from central banks and financial supervisory authorities. Participants were encouraged to actively intervene 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/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.

Tomaž Čemažar, Bank of Slovenia

Tomaž joined Bank of Slovenia in 2004. He started as inspector adviser, continuing as portfolio manager and head of Section Monitoring and Examinations inside Banking Supervision Department. Tomaž is a Deputy Director of Banking Supervision Department, where he is occupied with horizontal functions, mainly on-site missions, internal models inspections and planning. He is a member of Centralized On-site Inspections and Planning and Coordination Network inside Single Supervisory Mechanism and member of Standing Committee on Oversight and Practices at European Banking Authority. Before joining Bank of Slovenia, Tomaž held various positions in commercial bank and ICT company. He graduated at the University of Ljubljana, Slovenia, Faculty of Economic Sciences.

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, specializing in market and credit risks. He holds a Masters degree in Economics and Financial Economics.

Katja Ciglar, Bank of Slovenia

Katja Ciglar is a supervisor of financial risks and internal models at the Bank of Slovenia. Apart from on-site supervision her tasks consist of performing analyses of financial risks in the Slovenian banking system and participating in the SREP. She worked for several years as a risk analyst of the liquidity and interest rate risk at a commercial bank where she also gained experience in financial modeling.

Saša Rubin, Bank of Slovenia

Saša has been working in the Bank of Slovenia since 1996. All this time she worked on banking supervision, in the area of prudential banking regulation. For the last ten years, she is head of Prudential Banking Regulation Unit, responsible for monitoring the developments in the banking regulation area on international and especially EU level, as well as for transposition of EU legislation into national regulatory framework. She is a permanent member of Standing Committee for Prudential Regulation and Policy at European Banking Authority and Supervisory Policies Network at the ECB.

Vilma Hanžel Kratochwill, Bank of Slovenia

Vilma holds a Masters degree in Macroeconomics from the University of Ljubljana. She has been working for the Bank of Slovenia for 22 years, the majority of which in the Banking Supervision Department, starting as an off-site analyst, with stronger focus on liquidity risk and systemic risk. After working for two years in Financial Stability Department as Head of section for Financial Stability Analysis, she returned in Banking Supervision and continued her work as an Adviser with major topics of consolidated supervision and corporate governance. Currently she works as Joint Supervision Team sub-coordinator.

Arnaud Lauwers, National Bank of Belgium

Arnaud is Head of Mission on-site banking inspection at the National Bank of Belgium (NBB). Within the Single Supervisory Mechanism (SSM), Arnaud was nominated by the ECB to conduct banking inspections of significant Belgian banks. Before joining the NBB, Arnaud gained a large banking experience in various positions (Operational Risk, Audit, Portfolio Management...) within the BNP Paribas group having operated at European level including Turkey.

Arnaud is also a lecturer of ''Operational Risk Management'' at the Belgian Banking Federation, of ''Audit, Governance and Risk Management'' at Kluwer Training and co-animated a workshop on ''risk based on site banking inspections'' in 2016 at the Central Bank of Macedonia.

Jeroen Redee, National Bank of Belgium

Jeroen is an on-site inspector banking supervision at the National Bank of Belgium, where he is currently working in the field of market risk. He recently graduated as a MSc in Business Administration with a specialization in Finance and Risk Management at Ghent University. He previously worked at the Ministry of Finance Belgium and in the banking sector as an intern. In his spare time, he is committed to the local youth movement.

Partners

This learning initiative was supported by:

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