Annex

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Annex

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Introduction and purpose

• The CBT is an international code that allows central banks and their stakeholders to map transparency practices of the central bank to international best practices.
• Purpose: to enhance transparency and accountability of the central bank and contribute to policy effectiveness.
• The CBT is not intended as a governance code.
• The Annex presents selected principles from international standards that relate to transparency; the transparency-related principles listed are for information purposes only and do not represent an IMF interpretation, assessment, or guidance.

Relation to international financial policy standards

• The CBT relies on the following international standards in microprudential supervision, resolution, and financial market infrastructures:
  • Basel Committee on Banking Supervision’s (BCBS) Core Principles for Effective Banking Supervision.
  • International Association of Insurance Supervisors’ (IAIS) Insurance Core Principles and Common Framework for the Supervision of Internationally Active Insurance Groups.
  • International Organization of Securities Commissions’ (IOSCO) Objectives and Principles of Securities Regulation.
  • Financial Stability Board’s (FSB) Key Attributes of Effective Resolution Regimes for Financial Institutions.
  • Committee on Payments and Market Infrastructures and IOSCO’s (CPMI‑IOSCO) Principles for Financial Market Infrastructure.
• The Annex is not to be used for assessing compliance with the CBT and does not contain a description of maturity of practices (e.g., core, expanded, or comprehensive) on transparency for supervisors, resolution authorities, and FMI overseers.
• Transparency issues in the Annex will be assessed by respective assessors in banking, insurance, securities, resolution, and financial market infrastructure when they undertake full assessments or prepare technical notes.

Differences in statement and methodology across standards

• Banking (BCP):
  • Core principles, essential criteria (EC), and additional criteria are contained in one BCBS document.
  • “Essential criteria” should be present to demonstrate compliance; “additional criteria” may be relevant for more sophisticated banking organizations.
• Insurance (ICP):
  • Principle statements (highest level), Standards (key high-level requirements), and Guidance (facilitating understanding; not requirements) are contained in one IAIS document.
• Securities (IOSCO):
  • Principles (P) contained in one document and methodology in another; methodology supports self-assessment or third-party assessment.
• Resolution (FSB Key Attributes, KA):
  • KAs set out core elements for effective resolution regimes; the assessment methodology proposes a set of essential criteria (EC) and explanatory notes (EN).
• Financial Market Infrastructure (PFMI, CPMI‑IOSCO):
  • Principles (P) in one document; disclosure frameworks and assessment methodology in another; two sections: requirements for FMI safety/soundness/efficiency and responsibilities of authorities.

Core transparency-related themes and selected principles

• Legal framework and mandate
  • BCP1: Responsibilities, Objectives and Powers — an effective system of banking supervision has clear responsibilities and Objectives and a suitable Legal Framework to provide necessary legal Powers.
  • ICP1: Objectives, Powers and Responsibilities of the Supervisor — Primary legislation should clearly define authority, Objectives (including to protect policyholders; promote the maintenance of a fair, safe and stable insurance market; contribute to financial stability), and Powers.
  • KA2: The Legal Framework should identify one or more resolution authorities and provide a clear Mandate; where multiple authorities exist, identify a lead authority and clear allocation of Objectives, Functions and Powers.
• Autonomy and operational independence
  • BCP2 EC1, EC2, EC6: Operational Independence, accountability, governance, transparent appointment/removal processes, and financing that does not undermine Autonomy.
  • ICP2 (ICP2.1, ICP2.1.1, ICP2.1.2, ICP2.3, ICP2.3.1, ICP2.3.2, ICP2.3.3): Supervisor should be operationally independent, financed in a manner that does not undermine Independence, with transparent appointment/dismissal procedures and disclosure of governing body composition and remuneration mechanisms.
  • KA2 EC2.3, EN2(d): Resolution authority should be operationally independent with safeguards such as transparent appointment procedures and statutory constraints.
• Decision-making arrangements and accountability
  • BCP2 EC1: Operational Independence, accountability and governance prescribed in legislation and publicly disclosed.
  • KA2 EC2.4: Resolution authority is accountable through a transparent framework for discharge of duties.
  • IOSCO P2: Regulator should be operationally independent and accountable; accountability implies periodic public reporting and transparency in process and conduct.
• Communication, confidentiality, and public disclosure
  • BCP3: Laws/regulations provide a framework for cooperation and collaboration reflecting the need to protect confidential information.
  • ICP2.0.4, ICP2.7, ICP2.8.1: Transparency reinforces accountability; supervisors should publish information consistent with confidentiality requirements and protect confidential information by legislation.
  • IOSCO P2: Confidential and commercially sensitive information must be respected and safeguarded.
  • PFMI Responsibility C (P4.3.2): Authorities should publicly disclose their regulatory, supervisory, and oversight policies with respect to FMIs; materials should be readily available.
• Instruments, powers, and supervisory tools
  • BCP1 EC6: Supervisors have the power to take timely corrective action; impose sanctions; revoke licenses; cooperate to achieve orderly resolution, including triggering resolution where appropriate.
  • ICP4, ICP10: Licensing requirements and preventive, corrective measures and sanctions should be clear, objective, consistent, and publicly disclosed.
  • KA3 (EN3(e), EN3(f)(iii), EN3(r)): Resolution authorities should have a broad range of resolution Powers, exercisable without shareholder/creditor consent where necessary, and legal certainty and transparency for bridge institutions and other measures.
  • PFMI Responsibility A (P4.1.2): Authorities should publicly disclose criteria used to identify FMIs subject to regulation, supervision, and oversight.
• Coverage and access to information
  • BCP4 EC5: Publish a current list of licensed banks, including branches of foreign banks, in an Easily accessible way.
  • ICP4.7, ICP4.7.1, ICP4.7.2: Publish a complete list of licensed insurance legal entities and the scope/conditions of licenses where they affect the public.
  • BCP28 EC5 and ICP24.5, ICP24.5.1, ICP24.5.2: Supervisors should regularly publish aggregate information and data/statistics on sectors to facilitate public understanding and market discipline; provide access to sufficiently detailed data directly or via others.
  • KA1 EC1.1: Resolution regime scope and circumstances are clearly defined in the Legal Framework.
  • KA2 EC2.7: Resolution authority should have unimpeded access to firms where material for resolution planning and implementation.
• Coverage of FMIs and application of principles
  • PFMI P1.20 and Responsibility D (P4.4.1): Presumption that all CSDs, SSSs, CCPs, and TRs are systemically important; authorities should adopt CPSS‑IOSCO Principles and apply them to systemically important payment systems, CSDs, SSSs, CCPs, and TRs; if an FMI is not considered systemically important, authorities should disclose the name and rationale.
• Coordination: domestic and international cooperation
  • BCP3, ICP25, IOSCO D ¶14: Laws/regulations should provide frameworks for cooperation with domestic and foreign supervisors, including information‑sharing mechanisms that protect confidentiality.
  • KA2 EC2.1 and related text: Where multiple resolution authorities exist, roles and responsibilities should be clearly defined and coordinated; identify lead authority when authorities in same jurisdiction resolve entities of the same group.
  • KA7 (7.4, 7.5, 7.6): Treatment of creditors and ranking in insolvency should be transparent and expedited processes should exist to give effect to foreign resolution measures; resolution authorities should have capacity in law to share information subject to confidentiality.
  • PFMI Responsibility E (P4.5.1, P4.5.2, P4.5.3, P4.5.10): Authorities should cooperate domestically and internationally, inform relevant authorities about cross‑border FMIs, and provide advance notification of pending material regulatory changes and adverse events that may affect other authorities.
• Accountability and reporting for resolution authorities
  • KA2 EC2.4 and EN2(e): Resolution authority should be accountable through a transparent framework including procedures for internal/external review and the periodic publication of reports on resolution actions and policies; public reports may include case-specific reports once a resolution has concluded, but operational resolution plans or resolvability assessment results of individual banks need not be disclosed.

Selected references cited in the Annex (years preserved)

• “Core Principles for Effective Banking Supervision.” Basel Committee on Banking Supervision, 2012.
• “The Basel Framework.” Basel Committee on Banking Supervision, 2020.
• “Insurance Core Principles and Common Framework for the Supervision of Internationally Active Insurance Groups.” International Association of Insurance Supervisors, 2019.
• “Objectives and Principles of Securities Regulation.” International Organization of Securities Commissions, 2017.
• “Methodology for assessing implementation of the IOSCO Objectives and Principles of Securities Regulation.” International Organization of Securities Commissions, 2017.
• “Key Attributes of Effective Resolution Regimes for Financial Institutions.” Financial Stability Board, 2014.
• “Key Attributes Assessment Methodology for the Banking Sector.” Financial Stability Board, 2016.
• “Public Disclosures on Resolution Planning and Resolvability - Discussion Paper for Public Consultation.” Financial Stability Board, 2019.
• “Principles on Bail‑in Execution.” Financial Stability Board, 2018.
• “Recovery and Resolution Planning for Systemically Important Financial Institutions: Guidance on Developing Effective Resolution Strategies.” Financial Stability Board, 2013.
• “Principles for Financial Market Infrastructures (PFMI).” CPMI‑IOSCO, 2012.
• “Key Standards for Sound Financial Systems; Financial Regulation and Supervision.” Financial Stability Board, 2020.
• Financial Sector Assessment Program, IMF/World Bank, 2020.

References

• Introduction
• Principles
• Practices