Saudi Arabia: Financial Sector Assessment Program-Detailed Assessment of Observance-Basel Core Principles for Effective Banking Supervision
IMF Staff Country Reports, September 4, 2024
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Bibliographic details
- Published: September 4, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400288111.002
Overview
- Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision for the Saudi Arabia Financial Sector Assessment Program.
- Saudi Central Bank (SAMA) has progressively updated its regulations and continued focus on this process will be important.
- SAMA’s responsibility for banking supervision is clearly set out in the law, although without clearly establishing the promotion of safety and soundness of banks and the banking system as an explicit or primary mandate.
- There is room to strengthen SAMA’s operational independence, accountability framework, transparency, and legal protection.
Legal and Institutional Framework
- SAMA’s responsibility for banking supervision is set out in law but lacks an explicit or primary mandate to promote safety and soundness of banks and the banking system.
- Identified weaknesses relate to:
- operational independence;
- accountability framework;
- transparency; and
- legal protection.
Supervisory Framework and Practices
- Strengthening powers and updating regulations, along with developing internal guidelines, will help strengthen processes for:
- licensing;
- transfer of significant ownership and controlling interest; and
- major acquisitions by banks.
- SAMA’s well-established risk-based approach:
- would benefit from a review of the scope of application of supervisory oversight, tools, and reporting.
Prudential Requirements and Monitoring
- Prudential requirements mostly apply (appropriately) at both a solo and consolidated level.
- Monitoring is in practice only at the domestic level.
Key Subject Areas and Keywords
- Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Bank supervision, Credit risk, Crime, Financial regulation and supervision, Market risk, Operational risk
- Keywords: adequacy ASSESSMENT process, Anti-money laundering and combating the financing of terrorism (AML/CFT), Bank supervision, banking control law, banking supervision department, counter financing, Credit risk, Global, IMF-World Bank Financial Sector Assessment Program, Market risk, Operational risk
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- 1sauea2024003-print-pdf