Spain: Financial Sector Assessment Program—Technical Note on Regulation and Supervision of Less Significant Institutions
IMF Staff Country Reports, August 1, 2024
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- Spain: Financial Sector Assessment Program—Technical Note on Regulation and Supervision of Less Significant Institutions
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Bibliographic details
- Published: August 1, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400285820.002
Executive findings
- The Banco de España’s (BdE) extensive efforts to improve corporate governance of cooperative LSIs are commendable.
- BdE monitors LSIs’ capital and liquidity levels and exposures to interest rate risk in the banking book (IRRBB).
- Extensive regulatory requirements and supervisory activities of LSIs’ credit risk have been instrumental in covering credit risk as a key priority.
- Gaps exist in the related-parties framework that need reform to address shortcomings relative to international standards.
- Joint work between the BdE and Sepblac presents an opportunity to enhance the risk-based aspects of oversight of anti-money laundering and countering the financing of terrorism (AML/CFT).
Supervisory priorities and gaps
- Corporate governance
- Recommendation: Continue BdE work to improve corporate governance of cooperative LSIs with additional focus on onsite activities.
- Liquidity risk and IRRBB
- Finding: Existing monitoring covers capital, liquidity levels, and exposures to IRRBB.
- Recommendation: BdE should further increase supervisory scrutiny of LSIs’ management of liquidity risk and IRRBB.
- Credit risk and related parties
- Finding: Extensive regulatory requirements and supervisory activities have been instrumental in addressing credit risk.
- Recommendation: Reform the related-parties framework to address gaps relative to international standards.
- AML/CFT oversight
- Finding: BdE’s joint work with Sepblac should be leveraged.
- Recommendation: Use the BdE–Sepblac collaboration to enhance risk-based oversight of AML/CFT.
Policy recommendations (summarized)
- Continue and deepen corporate governance improvements for cooperative LSIs, emphasizing onsite supervisory activities.
- Increase supervisory scrutiny of LSIs’ liquidity risk management and IRRBB beyond current monitoring.
- Reform the related-parties framework to close gaps versus international standards and strengthen credit-risk oversight.
- Enhance the risk-based aspects of AML/CFT oversight through BdE and Sepblac joint initiatives.
Spain: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions (August 1, 2024).
Content in this bundle
- 1espea2024006-print-pdf — EXECUTIVE SUMMARY