Part VI Bank Group Supervision, 26 Cross-Border Supervision of Bank Groups

Subject(s):

Banks and cross-border issues — Regulation of banks — Supervision

This chapter discusses the cross-border supervision of banks. A currently popular method is ‘colleges’ of supervisors. The basic idea is that in order to regulate an international bank you convene a meeting of all of the regulators who regulate different parts of that bank (in jurisdictions which have different regulators for different financial activities there may be several regulators present from one jurisdiction), and discuss in a concerted fashion the progress and performance of the bank as a whole. However, the main problem with this approach is the conflicting views stemming from the different priorities of different regulators, driven generally by national considerations. The EU has adopted a lead supervisor approach in which a single supervisor is appointed as responsible for overseeing the affairs of any group which straddles more than one member state. Since the EU architecture does not, by and large, give national supervisors any actual powers outside their home jurisdictions, the role of EU lead supervisor is broadly confined to consolidated supervision.