On 23 – 24 September, the National Bank of Ukraine (NBU) initiated an international round table on Practical Experience of Risk-Based Supervision Introduction Under SREP Methodology.
During the two days, experts shared their experience on challenges and practical aspects of introducing a risk-based supervision under the SREP methodology and specifics of introducing bank supervision approaches. Over 150 attendees joined the event from the European Central Bank (ECB), central banks of the Netherlands, Lithuania, Morocco, Moldova, Georgia, Azerbaijan, Uzbekistan, Czech Republic, Northern Macedonia, Kyrgyzstan, Serbia, Kazakhstan, Romania, and the Polish Financial Supervision Authority.
"Implementing best international practices of risk-based supervision is one of the NBU’s priorities. In recent years, Ukrainian laws on banking regulation and supervision have greatly improved, and now NBU experts can resort to a professional judgement when performing banking supervision, as well as establish advanced values of economic ratios for banks based on their assessment results," noted Yaroslav Matuzka, NBU Deputy Governor, in his opening speech.
At the same time, Yaroslav Matuzka mentioned that the process of introducing ІСААР and ІLААР procedures is underway. Furthermore, the requirements to banks on arranging their corporate governance, including the risk management system, have been considerably improved.
At the round table representatives of the ECB and the NBU shared their experience and discussed the following:
- the ECB’s approaches to SREP, challenges the supervisors encountered during the pandemic, and priorities in supervision in 2021
- practices for introducing SREP in Ukraine including cooperation of units of the NBU for assessment of banks according to the SREP methodology including the assessment specifics of banks’ business models, corporate governance, and internal control
- integration of onsite inspections into the SREP risk-based supervision: special planning of the inspection process and conducting onsite inspections
- assessment history of corporate governance in banks, including common issues in organizing corporate governance, as well as ways for improvement
- supervision of information and cybersecurity: rapid development of digital service channels, impact of cyber risk on the banking system, approaches to assessing operational risk etc.
Experts from Lithuania, Moldova, Morocco, Georgia, and the Netherlands shared their SREP implementation history starting from the organizational chart of the supervision function to supervisory risk assessment methodology.
The event attendees focused on specifics of introducing the supervisory inspection process and assessment of banks according to the SREP methodology of every participanting country, since the process should consider the specifics of national laws, and the development of the banking system.
Generally, speakers and participants of the international round table noted the urgency of and the demand for such meetings in the future to share experience and discuss burning issues encountered by experts.
"The NBU continues to strengthen its position as the international platform for sharing expertise and enjoys the status of an institution with experience of interest and use to foreign central banks," said Yaroslav Matuzka.