Dhaka, Bangladesh (BBN)– Bangladesh has proposed to develop an Asian standard on banking supervision and regulation like as European one in addition to Basel framework.
Bangladesh Bank (BB) Deputy Governor SK Sur Chowdhury has floated the idea at Asia Regional Conference on Banking Supervision and Regulation held in Tokyo on September 14-15 last, a central bank statement said.
It was a high level regional conference on banking supervision and regulation where more than 20 counties were attended to discuss on enhancing supervision mechanism and formulating best fitted regulations for their jurisdictions.
Resolution of a global bank and proposal for a similar standard in supervision for consolidation was appreciated at the discussion.
Regarding regulatory issues in cross-border and consolidated supervision, Mr. Sur Chowdhury said the national laws and regulations provide an adequate basis to support the consolidated supervision of banking groups, in the case of a parent bank and its subsidiaries.
“There is no international legal framework in case of failure of such banks though it has national fiscal responsibility and mandate since LOLR, deposit insurance and resolution cost is involved for those banks,” the deputy governor noted.
He also said the central bank of Bangladesh has the authority and framework to adequately vet and approve foreign banking entities seeking to establish a presence in Bangladesh or domestic banks planning on establishing branches or subsidiaries in foreign jurisdictions.
“One challenge in considering applications from foreign banks to establish a branch in Bangladesh is judging the adequacy of banking supervision in the home country,” Mr. Chowdhury explained.
He also said the bank be adequately supervised in the home country; however, the sources of information on the adequacy of home country supervision may be limited.
The deputy governor also presented a paper titled as ‘Successes and Challenges in IMF/JSA Technical Assistance on Banking Supervision covering its necessity and impediment in Asian region’ at the conference.
Mr. Chowdhury also participated in the panel discussion for good governance.
The discussions of conference were separated into three sessions –Banking Supervision and Commercial Bank Governance: Issues and Challenges in the Post-financial Crisis Environment, Success and Challenges on in IMF/JSA Technical Assistance on Banking Supervision and Emerging Regulatory Issues in Cross-border and Consolidated Supervision.
Mitsuhiro Furusawa, Deputy Managing Director of the International Monetary Fund (IMF) inaugurated the conference while Masatsugu Asakawa, Vice Minister of Finance for International Affairs, Ministry of Finance, Japan spoke on the closing day of the international conference.
Mohammad Naushad Ali Chowdhury, Executive Director in charge of Offsite and Onsite supervision departments of the BB and Mohammad Shahriar Siddiqui, Joint Director of Financial Stability Department also participated in the conference.