IMF Working Papers

Good Supervision: Lessons from the Field

By Tobias Adrian, Marina Moretti, Ana Carvalho, Hee Kyong Chon, Katharine Seal, Fabiana Melo, Jay Surti

September 6, 2023

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Tobias Adrian, Marina Moretti, Ana Carvalho, Hee Kyong Chon, Katharine Seal, Fabiana Melo, and Jay Surti. Good Supervision: Lessons from the Field, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Keeping banks safe and sound hinges on good supervision. The bank failures of March 2023 precipitated questions about the effectiveness of supervision. This paper reflects on lessons learned from this banking turmoil and reviews global progress in delivering effective supervision over the past ten years. It finds progress in areas like risk monitoring, stress testing, and business model analysis. Yet, progress has also been hampered by deficiencies in supervisory approaches, techniques, tools, and (use of) corrective and sanctioning powers, as well as by unclear mandates, inadequate powers, and lack of independence and resources. Overcoming these deficiencies requires supervisors to improve their own performance and other policy makers to contribute to ensuring vigilant, independent and accountable supervision.

Subject: Bank supervision, Basel Core Principles, Corporate governance, Economic sectors, Financial regulation and supervision, Financial sector policy and analysis, Financial sector stability, Stress testing

Keywords: Bank strategy, Bank supervision, Bank turbulence, Bank turmoil, Banks, Basel Core Principles, Business model, Compliance departments, Corporate governance, Courses of action, Financial sector stability, Global, Lack of independence, Light touch supervision, Prudential standards, Risk profile, Stress testing, Supervision, Supervision framework, Supervision process

Publication Details

  • Pages:

    34

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2023/181

  • Stock No:

    WPIEA2023181

  • ISBN:

    9798400253782

  • ISSN:

    1018-5941

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