《金融專業(yè)英語》chapter6

金融專業(yè)PartTwoBankingIndustryinChina英語456CentralBank—PBCCommercialBanksSupervisionofBankingContentsSupervisionofBanking6ChapterSection6.1ImportanceandObjectivesofBankingSupervisionSection6.2LicensingProcessSection6.3ArrangementsforOngoingBankingSupervisionSection6.4DealingwithWeakBanksChapter6SupervisionofBankingSection6.1ImportanceandObjectivesofBankingSupervision6.1.1TheRoleofBanksandImportanceofBankingSupervision6.1.2ObjectivesofBankingSupervision6.1.3PreconditionsforEffectiveBankingSupervisionItiswidelyrecognizedthatbanksaredifferentfromotherprofit-seekingbusinessinthattheeconomicandfinanciallifeofacountrydependsonbanksinthreeimportantrespects.Banksoccupyacentralplaceinthepaymentmechanism*forhousehold,governmentandbusiness.6.1.1TheRoleofBanksandImportanceofBankingSupervisionBanksinmarketeconomiesplayamajorroleintheallocationoffinancialresources,intermediatingbetweendepositorsofsurplusfundsandwould-beborrowers,onthebasisofactivejudgmentsastothelatter’sabilitytorepay.Ontheotherhand,banksarealsoprovidedwithimportantelementsofofficialprotection.6.1.1TheRoleofBanksandImportanceofBankingSupervisionFirstly,thekeyobjectiveofsupervisionistomaintainstabilityandpublicconfidenceinthefinancialsystem.Thesecondgoalofbanksupervisionistoensurethatbanksoperateinasafeandsoundmannerandthattheyholdcapitalandreserves*sufficienttocovertherisksthatmayariseintheirbusiness.Thirdly,arelatedgoalistoprotectdepositors’fundsand,ifanybankshouldfail,tominimizethelossestobeabsorbedbythedepositinsurancefund.6.1.2ObjectivesofBankingSupervisionThefourthgoalofbanksupervisionistofosteranefficientandcompetitivebankingsystemthatisresponsivetothepublicneedforhighqualityfinancialservicesatreasonablecost.Thefifthandfinalgoalofbanksupervisionistoensurecompliancewithbankinglawsandregulations.6.1.2ObjectivesofBankingSupervisionSoundandsustainablemacroeconomicpolicies.AwelldevelopedpublicInfrastructure.Effectivemarketdiscipline.Mechanismsforprovidinganappropriatelevelofsystematicprotection.6.1.3PreconditionsforEffectiveBankingSupervision6.2.1PhasesoftheProcess6.2.2FactorsEvaluatedbytheCharteringAuthorities6.2.3BaselCommittee’sRequirementsonBankLicensingSection6.2LicensingProcessThefirstsupervisorytechniqueistheprocessoflicensingorcharteringbanks.Bankcharterisusuallygrantedbythecentralbankoraseparatesupervisorybodyofacountry.Theactuallicensingprocessesandscrutinizingfactors*consideredbydifferentcharteringauthoritiesmaynotbethesamebutusuallysharethefollowingsimilarities.Section6.2LicensingProcessAninformalpre-filingstageTheapplicationstageTheorganizingstageOfthesestages,theapplicationstageisthecoreofthebanklicensingprocess.6.2.1PhasesoftheProcessTHEBANKLICENSINGPROCESSGENERALLYCONSISTSOFTHREEPHASES:Thebank’sprospectsforfutureearnings(i.e.,whetheritwillbesuccessfulandprofitable);Thequalificationsofthebank’sproposedmanagement;Theadequacyofthebank’scapitalstructure;Theconvenienceandneedsofthecommunitytobeservedbythebank.6.2.2FactorsEvaluatedbytheCharteringAuthoritiesINEVALUATINGACHARTERAPPLICATION,THECHARTERINGAUTHORITIESGENERALLYCONSIDERS4FACTORS:Havingitsstatuteincompliancewithlaw;Havingtheminimumregisteredcapitaldefinedbythelaw;Havingdirectorsandseniormanagerswithexpertiseandprofessionalexperiencecommensuratewiththeirpositions;andHavingtherequiredbusinesspremise,safetymeasuresandotherfacilitiesrelevantwiththebusinessthereof.THEESTABLISHMENTOFABANKINCHINASHALLMEETTHEFOLLOWINGREQUIREMENTS.6.2.2FactorsEvaluatedbytheCharteringAuthoritiesThesupervisorsinexaminingtheapplicationfortheestablishmentofabankmayalsotakeintoaccounttheneedforeconomicgrowthandthecompetitionofthebankingindustry.6.2.2FactorsEvaluatedbytheCharteringAuthoritiesTheBaselCommitteeonBankingSupervision*(HereinafterreferredtoastheBaselCommittee)isacommitteeofbankingsupervisoryauthorities,whichwasestablishedbythecentralbankGovernorsoftheG10countriesin1978.Itiscurrentlymadeupofseniorrepresentativesofbankingsupervisoryauthoritiesandcentralbanksfrom13countries.InSeptember1997,theBaselCommitteepublishedCorePrinciplesforEffectiveBankingSupervision,whichwererevisedandreissuedin2006toreflectthechangesthathaveoccurredsince1997inbankingsupervisionandregulationinindividualcountries.6.2.3BaselCommittee’sRequirementsonBankLicensing6.3.1RisksinBanking6.3.2KeyPrudentialIssues6.3.3Off-siteSurveillance6.3.4On-siteExaminationsSection6.3ArrangementsforOngoingBankingSupervision1CreditRisk2MarketRisk3LiquidityRisk4OperationalRisk5LegalRisk6.3.1RisksinBanking6ReputationRiskFromasupervisoryperspective,riskisthepotentialthatevents,expectedorunanticipated,mayhaveanadverseimpactonthebank’scapitalorearnings.Prudentialrequirementscoverabroadspectrumofbankingactivitiesandplayanimportantpartinassuringtheeffectivenessofthesupervisoryprocess.Ofwhich,therearefivekeyareaswheretheextensiveprudentialpolicieshavebeenimplementedbybankregulatorsofmostcountries,thesearecapitaladequacy,riskconcentration,assetquality,liquidityandinternalcontrols.6.3.2KeyPrudentialIssuesUndisclosedreserves;Revaluationreserves;Generalprovisions;Hybriddebtcapitalinstruments;Subordinatedtermdebt1.CapitalAdequacy(1)CoreCapital(2)SupplementaryCapital.(3)DeductionsfromCapital(4)TheRiskWeights6.3.2KeyPrudentialIssuesConcentrationofriskandlargeexposuresisoneofthemajorsupervisoryconcerns.Largeexposurestoasingleborrower,ortoagroupofrelatedborrowersareacommoncauseofbankingproblemsinthattheyrepresentacreditriskconcentration.Largeconcentrationscanalsoarisewithrespecttoparticularindustries,economicsectors,orgeographicalregionsorbyhavingsetsofloanswithothercharacteristicsthatmakethemvulnerabletothesameeconomicfactors.2.RiskConcentration6.3.2KeyPrudentialIssuesAssetqualityisthemostimportantfactorindeterminingabank’screditworthiness.Assetqualitydirectlyaffectstheprovisioningdecisionswhichlargelydeterminethelevelofprofits.Inturn,theprofitstreamwillaffectcapitalratiosandthesolvencyofeachbank.Assetqualityandadequacyofprovisionsarethereforethemajorareastowhichbankingsupervisorsshouldpayparticularattention.Theyneedtobefullyawareoftheassetqualityofindividualbanksandtobesatisfiedthatadequateprovisionshavebeenmaintainedforproblemassets.3.AssetQuality6.3.2KeyPrudentialIssuesBanksmayprovideforliquidityinthefollowingways:Holdcashornear-cash*assets;Appropriatecashflowsfrommaturingassets,viaassetsportfoliomanagement;Newdepositsmaybeattractedandmoniescanbeborrowedinthemoneymarkets.4.Liquidity6.3.2KeyPrudentialIssuesAsystemofeffectiveinternalcontrolsisacriticalcomponentofbankmanagementandafoundationforthesafeandsoundoperation*ofbankingorganizations.Suchasystemhelpstoensurethatgoalsandobjectivesofabankingorganizationwillbemet,thatthebankwillachievelong-termprofitabilitytargets,andmaintainreliablefinancialandmanagerialreporting,thatrisksinbankingactivitiesareeffectivelyidentified,understood,measured,monitoredandcontrolledtoanacceptablelevel,thatthebankwillcomplywithlawsandregulationsaswellaspolicies,plans,internalrulesandprocedures,andthatthebankwilldecreasetheriskofunexpectedlosersordamagetothebank’sreputations.5.InternalControls6.3.2KeyPrudentialIssuesWewillstrengtheninfrastructure.Firstly,designandissuenewcapitaladequacyratiostatements,andconstantlyimprovetheoff-sitesupervisionstatementsystem;Secondly,promotethequalitymanagementandevaluationofbankingregulatorystatisticaldatatofurtherconsolidatethebasisofdataquality;Thirdly,graduallypromotetheoff-sitesupervisioninformationsystemmigrationandthecorrespondingupgradework,explorethesupervisiondatastandardizationpilot;Fourthly,strengthenthecontactandinteractionwiththesystem,relevantdepartmentsandthemarket,throughspecialtraining,marketanalystsquarterlydiscussion,"monthlytalk"andotherformstostrengthenpersonneltraining,improvebusinesscapacity.6.3.3Off-siteSurveillanceImproveoff-sitesupervisionmethods.Firstly,theoff-sitesupervisionlinkageplatformisbuilttoensurethesmoothandeffectivelinkageofthesupervisionprocess,thehorizontallinkageofdepartments*,theupperandlowerlinkageoflines,andtheinternalandexternalauditlinkagewiththesupervisionobjects.Secondly,enrichtheoff-sitesupervisiontoolboxandsupplementaseriesofbasic,simpleandpracticaloff-sitesupervisiontools;Thirdly,strengthentheapplicationofoff-siteregulatorydataanalysis,andgivefullplaytotheforward-lookingrole*ofriskassessmentinthedisposalofhigh-riskinstitutionsandthedifferentiatedandcharacteristicdevelopmentofcommercialbanks.6.3.3Off-siteSurveillanceImprovetheeffectivenessofriskearlywarning.Firstly,monitortherisksofnewrealestateloansandinterbankmarketliquidityrisks*,andfurtherimprovetheindustrycreditmonitoringsystem;Secondly,wewillcloselytrackeconomicandfinancialconditionsathomeandabroad,furtherimprovethemonitoring,analysisanddisposalsystemforrisksinkeyareas,andpromptrisksasearlyaspossiblebymeansofquarterlybriefingsoneconomicandfinancialconditions,meetingsonprudentsupervision,andsoon,soastomoveaheadandclosetheoff-sitesupervision.6.3.3Off-siteSurveillanceAdheretotherisk-oriented,reasonabledeterminationofon-siteinspectionitems.Firstly,highlighthigh-risklinks,organizeandcarryouton-siteinspectionsofkeyareassuchasloanstolocalfinancingplatforms,bankfinancialservices,realestateloans,andriskmanagementofsystemicallyimportantBanks.Secondly,followtherisksofdifferentregions,differentinstitutionsanddifferentbusinesses,andcarryoutspecialinspectionsaccordingtothespecificrisksoftheregulatedinstitutionsinaccordancewiththeprincipleofdifferentiatedsupervision.Thirdly,inaccordancewiththeprincipleof"streamliningprojects,overallplanningandcoordination,andrationaldistribution*",on-siteinspectionshouldbecarriedoutatthelevelofcorporatebodiestoreveal,evaluateandcontrolrisksfromthesource.6.3.4On-siteExaminations6.4.1SymptomsandCauseofBankProblems6.4.2PrinciplesforDealingwithWeakBanks6.4.3CorrectiveActions6.4.4ResolutionIssuesandExit6.4.5ClosureoftheBank:DepositorPay-off

Section6.4DealingwithWeakBanksAweakbankisonewhoseliquidityorsolvencyisorwillbeimpairedunlessthereisamajorimprovementinitsfinancialresources,riskprofile,strategicbusinessdirection,riskmanagementcapabilitiesand/orqualityofmanagement.Section6.4DealingwithWeakBanksItisimportanttodistinguishbetweenthesymptomsandcausesofbankproblems.Thesymptomsofweakbanksareusuallypoorassetquality,lackofprofitability,lossesofcapital,reputationproblems,and/orliquidityproblems.Thedifferentsymptomsoftenemergetogether.Whilebankingdifficultiesusuallyresultfromacombinationoffactors,theyhavebecomeevidentascreditproblemsinthemajorityofcases.Thisshouldnotbesurprisinggiventhatlendinghasbeenandstillisthemainstayofbankingbusiness.Moreoftenthannot,creditlossesstemfromweaknessesinmanagementcontrolandcreditriskmanagementsystems.6.4.1SymptomsandCauseofBankProblemsApartfromcreditrisk,abank’sweaknessmayalsostemfromotherrisks,includinginterestraterisk,marketrisk,operationalrisk,andstrategicrisk.6.4.1SymptomsandCauseofBankProblemsTheguidingprinciplesforasupervisorwhendealingwithweakbanksincludethefollowing:Speed.Cost-efficiency.Flexibility.Consistency.Avoidingmoralhazard.Transparencyandcooperation.6.4.2PrinciplesforDealingwithWeakBanksCorrectiveactionsarethoseactionsrequiredtodealwithdeficienciesandchangethebehaviorinabank.Theycanbeimplementedvoluntarilybythebankunderthesupervisor’sinformaloversightor,ifnecessary,viaformalsupervisoryintervention.Inordertoformulateaplanofcorrectiveaction,therehastobeanassessmentofthenatureandseriousnessoftheweakness.Anon-siteassessmentisusuallythemostefficientwayofidentifyingthefullextentandthenatureoftheproblemsfacingabank.6.4.3CorrectiveActionsResolutionplans.Mergersandacquisitions.Purchase-and-assumptiontransactions.Bridgebank.1.ResolutionTechniques6.4.4ResolutionIssuesandExitPublicfundsfortheresolutionofweakbanksmaybeconsideredinpotentiallysystemicsituations,includingtheriskoflossordisruptionofcreditandpaymentservicestoalargenumberofcustomers.2.UseofPubli