Developments in the Organisational Structures of Banking and Financial Market Supervision: Aligning Organisational Solutions with the Country’s Needs

Developments in the Organisational Structures of Banking and Financial Market Supervision: Aligning Organisational Solutions with the Country’s Needs

• National Bank of Slovakia

• Banking Supervision Division

• Dubrovnik, May 2004

Current Status

• Central Bank – National Bank of Slovakia (NBS), responsible for banking supervision

• Financial Market Authority (FMA),

• responsible for capital and insurance market supervision, pension funds (retirement system reform)

Future (as of January 1, 2006)

• Integrated Financial Market Supervision will be

• exercised by:

Integrated financial market supervision will include:

• Banking and e-money institutions supervision

• Capital and insurance market supervision

• Supervision over entities of the capitalisation pillar of the compulsory retirement system (pension funds)

• Financial market regulation - authorisation to issue secondary legislation

Open Questions

• 1. Decision Making Process

• A two-level decision making process remains

• - First level (Vice-governor)

• - Second Level (Bank Board)

• + Possibility to appeal to the Supreme Court

Open Questions

• 2. Integrated Supervision Authority Independence

• Overall responsibility for the coduct of supervision and issuing of first level decisions in proceedings will

• a. remain with one person - vice-governor appointed and dismissed by the President of the SR upon the recommendation of the Goverment and with approval of the National Council of the SR

• b. special board of directors will be established

Open Questions

• 3. Financing of integrated financial market supervision

• Multiple-source financing model is under consideration:

• Self-financed by the NBS (direct link to the NBS budget)

• From contributions collected from supervised entities

Financial market supervision will cover the following areas:

• Licensing activities

• Off-site and on-site supervision on an individual and a consolidated basis

• Conduct of proceedings and issuing of decision in such proceedings, enforcement of issued decisions, including conditions imposed in such decisions

• Preparation of relevant legislation

Draft legislative changes to establish integrated financial market supervision

• Legislation addressing the institutional arrangement of supervision (The National Bank of Slovakia Act)

• Process law (Act on Financial Market Supervision)

• Substantive law (Laws and other legislation covering areas such as banking, stock exchanges, securities and investment services...)

Organisational and technical requirements for the implementation of integrated financial market supervision

• Legal aspects of FMA and NBS merger

• Human resources and organisation

• IT resources