Ninth International Conference of Banking Supervisors

Proceedings were opened by Mr. Erik Åsbrink, Minister of Finance of Sweden, and conference sessions were chaired by Mr. Tommaso Padoa-Schioppa, Chairman of the Basle Committee on Banking Supervision and Mr. Claes Norgren, Director General of the Financial Supervisory Authority. Four distinguished panellists, Mr. Stanley Fischer, First Deputy Managing Director of the International Monetary Fund, Mr. William Rhodes, Vice-Chairman, Citibank, Mr. György Surányi, President, National Bank of Hungary, and Mr. Roberto Zahler, President, Banco Central de Chile, participated in a discussion on "The importance of a sound banking system for economic growth". At the close of the conference, the William Taylor Memorial Lecture was delivered by Mr. Alan Greenspan, Chairman of the US Federal Reserve Board, and Mr. Ulrich Cartellieri, member of the Governing Board of Deutsche Bank AG.

The international conferences, held at two-yearly intervals since 1979, are designed to promote cooperation among national authorities in the supervision of international banking and to enable senior representatives of supervisory authorities from a large number of countries to exchange views on a range of current issues of common concern. The two main themes of the conference on this occasion were the supervision of cross-border banking and improving supervisory methods for domestic banks.

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The Chairman of the Basle Committee, delivering the opening address, updated conference participants on the recent work of the Basle Committee, including its work on market risk, derivatives and financial conglomerates, stressing the trend towards market-friendly supervisory approaches that has increasingly been taken by the Basle Committee. The speech emphasised the need for sound banking supervisory principles as an important contribution to stable macro-economic conditions, although support from the legal, accounting and institutional framework was also a prerequisite for creating a stable banking environment.

"Our being together here in Stockholm is proof of our commitment to common action and efforts to enhance supervisory effectiveness while respecting market developments" commented Mr. Tommaso Padoa-Schioppa, Chairman of the Basle Committee on Banking Supervision.

Mr. Padoa-Schioppa in his speech noted that the voluntary adherence of many national authorities to the Basle standards was gratifying but at the same time an additional responsibility for the Basle Committee. Although there were regular contacts with non-G-10 supervisors through regional meetings, the international conferences, training programmes, etc., ways might have to be devised to organise a more structured form of cooperation between the Basle Committee and supervisors in non-G-10 countries.

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The topic of the first day of the conference was the supervision of cross-border banking. Following an introduction by the Secretary General of the Basle Committee, Mr. Frederik Musch, participants debated a report prepared by a working group of members of the Basle Committee and the Offshore Group of Banking Supervisors designed to strengthen implementation of the 1992 Minimum Standards for the Supervision of International Banking Groups and their Cross-Border Establishments. The report, which will shortly be published, contains recommendations for improving the flow of information from host to home supervisors and vice-versa, for determining the effectiveness of home country supervision, for establishing a routine for inspections by home country supervisors, for improving supervisory standards in host countries and for dealing with potential gaps in cross-border supervision.

Following detailed discussion of the contents of the report, Conference participants, in their capacity as bank supervisors, endorsed the principles set out in the report and undertook to work towards their implementation in national centres. Regional groups of banking supervisors will carry on the discussions about the implementation of the report. It is intended that a survey should be conducted in advance of the next ICBS in 1998 to monitor the progress made in overcoming obstacles to effective consolidated supervision.

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On the second day, the topic for discussion was improving supervisory methods for domestic banks, with two sub-topics: qualitative supervision and domestic supervisory systems. These topics were introduced by Mr. Claes Norgren, Director General of the Financial Supervisory Authority of Sweden. The focus of the discussion on qualitative supervision was on internal controls, public disclosure and corporate governance, where conference participants discussed the impetus that supervisory authorities could give in each of these areas to improve market discipline. It was agreed that the Basle Committee and the regional groups should continue to pursue work on these topics with the aim of creating a healthy market environment in which best practice prevailed. The focus of the discussion on domestic supervisory systems was a paper summarising the results of a survey of national systems completed by 129 countries. The results were discussed in three sub-topics: quantitative methods, qualitative methods and capital.

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The next ICBS is to take place in 1998 in Sydney, Australia, at the invitation of the Reserve Bank of Australia.

Stockholm, 13th June 1996