New mandate and appointment of new Chairman of Joint Forum

Press release  | 
08 December 1999

The Basel Committee on Banking Supervision (Basel Committee), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) (the parent organisations) today announced the appointment of Mr Jarl Symreng as the new Chairman of the Joint Forum. Mr Symreng, a long-standing member of IAIS and current Chairman of its Technical Committee, is Head of the Insurance Department of Finansinspektionen of Sweden. He succeeds Mr Alan Cameron AM, from the Australian Securities and Investments Commission, who has completed his two-year term as Chairman of the Joint Forum.

The parent organisations also announced that the Joint Forum has been given an updated mandate to reflect not only the challenges being faced in the supervision of financial conglomerates but also to take into account the many cross-sectoral issues that supervisors must deal with.

The new mandate and background information on the Joint Forum are attached.

Joint Forum documents are accessible on the websites of the BIS (http://www.bis.org), IAIS (http://www.iaisweb.org) and IOSCO (http://www.iosco.org).

Mandate of the Joint Forum

The Joint Forum is a group of technical experts working under the umbrella of the following three international groupings of supervisory bodies: the Basel Committee on Banking Supervision, the International Organization of Securities Commissions and the International Association of Insurance Supervisors. Its work is focused on two key aspects, described below.

The Joint Forum continues to work in cooperation with other international bodies on issues where it shares a common interest.

The Joint Forum should make a work plan that reflects the priorities of the parent organisations. Topics may not necessarily be taken up or finished in the same time frame.

A. Issues of common interest to the three parent committees

(1) The Joint Forum should study issues of common interest to the three financial sectors and develop guidance and principles, as appropriate, in particular for:

  • risk assessments and management;
  • internal controls;
  • the use of the audit process in the supervision of regulated entities and corporate groups containing regulated entities;
  • corporate governance, including fit and proper tests;
  • outsourcing by firms of regulated functions and activities; and
  • the different definitions of banking, insurance and securities activities and the potential that they may lead to regulatory arbitrage.

(2) The Joint Forum has specific mandates as follows:

  • to compare the core principles issued by the banking, insurance and securities sectors, identifying common principles and understanding differences where they arise; and
  • to examine the different purposes of and approaches to capital requirements in the banking, securities and insurance sectors (including the different definitions of capital), and, if appropriate, develop further guidance and principles.

B. Issues relating to financial conglomerates

(1) The Joint Forum should enable bank, insurance and securities supervisors to share information about issues arising from the implementation of the principles issued and techniques developed by the Joint Forum. These pertain to:

  • coordination;
  • supervisory information sharing;
  • capital adequacy;
  • fit and proper tests;
  • intra-group transactions and exposures; and
  • risk concentrations.

The work may involve developing best practices to give effect to the principles set out in the papers.

(2) The Joint Forum has specific mandates as follows:

  • to study financial conglomerate structures that may impair effective supervision or otherwise be problematic, and, having regard to the findings of that study, if appropriate, develop guidance and principles; and
  • to assess the appropriateness of group-wide methods of supervision, and, having regard to the findings of that assessment, if appropriate, develop guidance and principles.

December 1999

Explanatory note

Background to the Joint Forum

The Joint Forum was established in early 1996 under the aegis of the Basel Committee on Banking Supervision (Basel Committee), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) to take forward the work of a predecessor group, the Tripartite Group, in examining supervisory issues relating to financial conglomerates. The Joint Forum comprises an equal number of senior bank, insurance and securities supervisors representing each supervisory constituency. 13 countries are represented in the Joint Forum: Australia, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. The EU Commission attends in an observer capacity. The Chairmanship of the Joint Forum rotates between the three parent organisations and is named for a two-year term. The current Chairman is Mr Jarl Symreng, Head of the Insurance Department of Finansinspektionen of Sweden.

The growing emergence of financial conglomerates and the blurring of distinctions between the activities of firms in each financial sector have heightened the need for cooperative efforts to improve the effectiveness of supervisory methods and approaches. The Basel Committee, IOSCO and IAIS consider the coming together of representatives of each supervisory constituency in the Joint Forum to be of great value in building the cooperative spirit necessary to address the supervisory challenges arising from financial conglomerates.

In carrying out its mandate, the Joint Forum has in the past year: (a) pursued practical means at domestic and international levels to facilitate the exchange of information between supervisors within their own sectors and between supervisors in different sectors, (b) investigated any legal or other barriers which could impede the exchange of information between supervisors within their own sectors and between supervisors in different sectors, (c) examined ways to enhance supervisory coordination, including the benefits and drawbacks of establishing criteria to identify and define the responsibilities of a coordinator, and (d) developed principles towards the more effective supervision of regulated firms within financial conglomerates.

The Joint Forum's original mandate focused, primarily, on diversified financial firms with complex organisational and management structures whose large-scale activities cross national borders and sectoral boundaries. The Joint Forum believes that the lessons drawn and the guidance prepared could also apply to smaller conglomerates or conglomerates that operate domestically.

The Joint Forum has recently updated its mandate, adding an additional dimension focused on cross-sectoral issues as well as those issues related to financial conglomerates. It also believes in cooperating with other international bodies on issues where it shares a common interest.