Colombia: Financial Sector Assessment Program–Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision
IMF Staff Country Reports, May 11, 2022
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- Colombia: Financial Sector Assessment Program–Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision
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Bibliographic details
- Published: May 11, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400207372.002
Summary findings
- Significant improvements to the legal framework and the supervisory process since the last Basel Core Principles (BCP) review.
- Superintendency of Financial Institutions (SFC) is an integrated supervisor covering banks, finance companies, insurance, securities, and other financial intermediaries, and serves as the bank resolution authority.
- The Financial Conglomerates Law (FCL) 1870 strengthened consolidated supervision by:
- Granting the SFC supervisory authority over financial conglomerates (CF).
- Adding holding companies as supervised entities in consolidated supervision.
- Defining the scope of supervision of financial conglomerates with standards on risk management, adequate capital, and corporate governance.
- Establishing minimum requirements for managing concentration risks and conflicts of interest in intragroup and related party exposures.
- The SFC has strengthened coordination and cooperation arrangements with foreign supervisors through signed Memoranda of Understanding (MOUs) and coordination mechanisms derived from the CCSBSO.
- The SFC has authority to request information from parent companies and access and authority to require information from ultimate beneficial owners.
Legal and supervisory framework
- The assessment highlights that the legal framework has been significantly improved since the previous BCP review.
- The SFC operates as an integrated supervisor and bank resolution authority, consolidating oversight across multiple financial sectors.
Consolidated supervision enhancements (FCL 1870)
- FCL 1870 provisions summarized:
- Supervisory authority over financial conglomerates (CF) explicitly granted to the SFC.
- Expansion of supervised entities to include holding companies.
- Clear standards set for:
- Risk management.
- Adequate capital.
- Corporate governance.
- Minimum requirements addressing:
- Management of concentration risks.
- Conflicts of interest in intragroup and related party exposures.
Cross-border cooperation and information access
- The SFC maintains strong coordination and cooperation with foreign supervisors:
- Use of signed Memoranda of Understanding (MOUs).
- Coordination mechanisms derived from the CCSBSO.
- Information-gathering powers:
- Authority to request information from parent companies.
- Access and authority to require information from ultimate beneficial owners.
- The FCL further enhanced the SFC’s ability to obtain information and coordinate cross-border supervision.
Subjects and keywords (as listed)
- Subjects: Credit, Credit risk, Financial regulation and supervision, Financial statements, International organization, Market risk, Monetary policy, Money, Operational risk, Public financial management (PFM)
- Keywords: Central America, Credit, Credit risk, credit risk Management System, Financial statements, Global, IMF-World Bank Financial Sector Assessment Program, Market risk, Operational risk, risk profile, Sistema de Administración de Riesgo de Liquidez, South America, staff team of the International Monetary Fund, Tier 1
Colombia: Financial Sector Assessment Program–Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision, IMF Staff Country Reports, May 11, 2022.
Content in this bundle
- 1colea2022005 — Detailed Assessment Report