The FSA, in 2015 took the decision to adopt a formalized Risk Based Supervision (RBS) framework in keeping with best international practice for regulators. The FSA continues to benefit from training delivered by CARTAC to enhance its application of RBS principles and in revising its RBS framework.
The desired outcome of the application of a risk-based approach to supervision is to operate at an optimum level. This entails a sufficiently deep understanding of institutions and industries to identify material changes and assess the probable impact on their risk profiles for timely interventions. The key benefits include systemic, forward-looking assessment within a formalized framework, allowance for early identification and intervention leading to a reduction in resolution costs, encouraging strong risk management practices and devotion of supervisory attention on a proportionate basis, in line with the risk profiles of the institutions and their systemic importance.
The application of RBS will ultimately result in the departure from the practice of conducting annual full-scope onsite inspections and use of the FSA’s limited resources wisely in directing efforts where the greater risks lie and conducting more focused visits, as necessary.
The FSA will further seek to p
Receive email notification for new posts.