BBA favours colleges of supervisors

The BBA has released recommendations for the use of supervisory colleges

LONDON – The British Bankers’ Association (BBA) has come out in favour of the increased use of supervisory colleges for the regulation of cross-border banks. The report includes proposals for the strengthening and streamlining of banking supervision and how colleges might be best employed.

The BBA highlights the need for colleges to be flexible, with regard to varying composition for regulating individual banks, and the possibility of a two-tiered structure comprising a core college concerned with overall strategy and a wider forum for high-level group-wide discussions and information exchange.

The report says colleges should focus on the group at the consolidated level and have a clear practical understanding of how the college should function day-to-day. The college should be chaired by the banking group’s home regulator, with supervisors present from significant branches and subsidiaries. The colleges should, according to the BBA, also help determine a bank’s Pillar II implementation strategy for Basel II.

Angela Knight, chief executive of the BBA, says: “The British Bankers’ Association believes banking regulation needs to move forward to meet the needs of an industry that increasingly operates across national boundaries. We believe colleges are effective and can build on existing practice to strengthen cross-border supervision, streamline and simplify practice and ensure customers and banks benefit from a system that allows for firm, fair and fast solutions.”