Range of Fina ncial Supervisory Structures

A wide variety of institutional structures for financial supervision exists around the world. There is a spectrum of alternatives rather than an “either-or” choice, and there is con­siderable variety within the spectrum and even within the same basic model. Although no universal pattern exists, there is a general trend toward (a) reducing the number of separate agencies, (b) integrating prudential supervisory arrangements, (c) reducing the role of the central bank in prudential oversight of financial institutions, (d) placing more emphasis on the role of the central bank in systemic stability, and, if a unified agency is created, (e) making this an agency other than the central bank.

National differences reflect a multitude of factors: historic evolution, structure of the financial system, political structure and traditions, and size of the country and financial sector. Table F.1 gives an indication of the range of models for supervisory structure that have been adopted around the world. The framework for organizing supervision functions is along sectoral lines (multiple supervisors), is integrated for two sectors regardless of the objectives of supervision, or is integrated across all sectors into unified agencies. In the unified model (i. e., integrated across all sectors) two variants have appeared: (a) a single integrated supervisor responsible for all objectives of supervision (except possibly compe­tition issues) and (b) two integrated supervisors—one focusing on prudential regulation and supervision of financial institutions and another focusing on conduct of business supervision across all institutional types and markets. This model of integrating super­visory functions according to objectives of supervision is further discussed in the section below on types of unified supervision, drawing on the experience of the Netherlands.

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