| 《International Convergence of Capital Measurement and Capital Standards,a Revised Framework,Comprehensive Version》(hereinafter called as BaselⅡ) is amended based on《International Convergence of Capital Measurement and Capital Standards》issued in 1988.BaselⅡincluded three Pillars,i.e.Capital Adequacy, Supervision Review Process and Market Discipline.The latter two Pillars are important alteration.From the view of Pillar 2,the author researched the innovation of banking supervision in China referring to the practice of FSA.BaselⅡhas emphasized the four principles and other aspects for banking supervision which the supervisory authority has to undertake through setting up Pillar 2 therein.It shows a clear way of banking supervision that bank takes risk and manages them,supervisory authority reviews the compliance and suitability of risk management in bank,and take necessary measures accordingly based on risk assessment.BaselⅡalso gives two other points for banking supervision,i.e. supervisory transparency and accountability,enhanced cross-border communication and cooperation,which focused on the supervisory review and risk assessment.The characters of Pillar 2 is showing the combination of supervisory review and management by bank itself,alteration of supervisory focus,the combination of quantitative indicators and qualitative judgement,international cooperation instead of individual supervision.England has played a leading role in application of BaselⅡthroughout the world.FSA utilized "ARROW" to assess the risk management in banks."ARROW" is an approach aimed at the process of risk management,not based on the business results only.FSA will take actions to financial institutions according to the supervisory ratings in order to prevent deterioration of risk.The theory of "ARROW" is centralized at the risk management process in bank,which follows the supervisory discipline of Pillar 2.As the supervisory subjects between England and China has essential similarity, "ARROW" is suitable for our supervisory environment and need for application of BaselⅡ,supervisory internationalization,"ARROW" can be implemented in China. The risk in banking sector in China are becoming important,supervisory authority need to change the review approach,perfect laws and stipulation in order to keep financial system stable in China.With comparison to Pillar 2 of BaselⅡand"ARROW",our supervisor authority can find the shortcomings and make the relative amendments。Our supervisory authority should innovate the supervisory approach in accordance with the principles of Pillar 2 for preparation for BaselⅡ. The author think,our supervisory authority can follow the best practice and accept the risk-oriented approach which ARROW represents to innovate banking supervision,which is one of the way in which supervisory efficiency will be raised and supervisory practice will be perfected.The author analyzed the current best practice taken by FSA by the way of comparison in order to avail of innovating our supervisory practice.From the view of Pillar 2 in BaselⅡ,our banking supervisory authority has to reform supervisory approach,raise the professional ability based on risk.Chinese banking supervisory authority may set up the risk-oriented supervisory rating system considering the micro and macro factors.For the micro factor,our banking supervisory authority may classify the risk category depending on the definition and quantitative indicator as per Pillar 1 and Pillar 2,and make assessment whether the capital adequacy ratio has meet the minimum requirement by BaselⅡ. In the meantime,our banking supervisory authority also need to decide whether the risk management and intemal control has catered for the requirement by Pillar 2 in BaselⅡ.The qualitative assessment result will be the basis on which supervisory authority adjust the capital adequacy ratio gauged by quantitative method and take the further correction action.For the macro factor,our banking supervisory authority should assess the impact of the individual bank on Chinese financial system by setting up the quantitative ratio and qualitative benchmark,and on compulsory supervisory subjects further.Based on the combination of the micro factor and macro factor,our banking supervisory authority will give the supervisory rating to a bank.The supervisory strategy will depend on the supervisory rating and will take correction action thereon, and scheme the supervisory plan of on-site examination and off-site examination respectively.The supervisory rating must be updated according to the supervisory findings on going basis.The supervisory strategy will be cycled focusing on the risk and supervisory authority allocate supervisory resource efficiently,i.e.the high supervisory rated bank will be examined deeply and frequently,all for achievement of compulsory supervisory subjects.
|
PDF Full Text Request