IMF Staff Country Reports

Spain: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions

August 1, 2024

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International Monetary Fund. Monetary and Capital Markets Department "Spain: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions", IMF Staff Country Reports 2024, 261 (2024), accessed November 21, 2024, https://doi.org/10.5089/9798400285820.002

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Summary

This paper presents a technical note on regulation and supervision of less significant institutions (LSI) as part of Financial Sector Assessment Program in Spain. The Banco de España’s (BdE) extensive efforts to improve corporate governance of cooperative LSIs are commendable, and in this context, it is recommended that work continue with additional focus on onsite activities. The BdE should further increase its supervisory scrutiny of LSIs’ management of liquidity risk and interest rate risk in the banking book (IRRBB), building on its existing monitoring of LSIs’ capital and liquidity levels and exposures to IRRBB. The extensive regulatory requirements and supervisory activities of LSIs’ credit risk have been instrumental to cover this key priority, but reform is needed to enhance the related-parties framework and address gaps relative to international standards. The BdE’s joint work with Sepblac should be an opportunity to enhance the risk-based aspects of oversight of anti-money laundering and countering the financing of terrorism (AML/CFT).

Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Credit risk, Crime, Financial regulation and supervision, Liquidity risk, Operational risk

Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), Autonomous communities, Banco de España, Credit risk, Dirección general de Seguros y Fondos de Pensiones, Executive Resolution authority, Global, Instituto de Crédito Oficial, Liquidity risk, Money laundering, Operational risk

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