Germany: Financial Sector Assessment Program-Detailed Assessment of Observance on the Basel Core Principles for Effective Banking Supervision
IMF Staff Country Reports, June 29, 2016
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- Germany: Financial Sector Assessment Program-Detailed Assessment of Observance on the Basel Core Principles for Effective Banking Supervision
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Bibliographic details
- Published: June 29, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475564617.002
Overview
- This paper provides assessment of the current state of the implementation of the Basel Core Principles for Effective Banking Supervision in Germany.
- Since the last Financial Sector Assessment Program (FSAP), German banking supervision has undergone profound changes, including approval of the Capital Requirements Regulation (CRR) and Directive (CRD IV), establishment of the European Banking Authority, and creation of the Single Supervisory Mechanism.
- The last FSAP (2011) found banking system supervision to be generally sound with some areas in need of improvement—although some of these issues have been addressed, others remain.
- Emphasis that, while the supervisory landscape in Germany evolves, it is crucial that supervisors communicate their expectations to banks and develop guidelines and regulations that can be used to substantiate enforceable measures.
Key Findings
- Assessment focuses on the implementation of the Basel Core Principles for Effective Banking Supervision in Germany.
- German banking supervision has experienced profound structural and regulatory changes since the 2011 FSAP.
- Some issues identified in the 2011 FSAP have been addressed; other issues remain outstanding.
- Supervisory effectiveness depends on clear communication of expectations to banks and development of guidelines and regulations that support enforceable measures.
Policy Recommendations and Supervisory Priorities
- Communicate supervisory expectations to banks clearly.
- Develop guidelines and regulations that can be used to substantiate enforceable measures.
- Continue addressing remaining areas for improvement identified in the 2011 FSAP while adapting to evolving supervisory structures (CRR/CRD IV, European Banking Authority, Single Supervisory Mechanism).
Subject Matter and Keywords
- Subject: Banking, Credit, Credit risk, Financial regulation and supervision, Liquidity risk, Market risk, Money, Operational risk
- Keywords: business organization, CR, Credit, Credit risk, Europe, Global, holding company, ISCR, Liquidity risk, management board, Market risk, Operational risk, risk management, risk profile, savings bank, senior management