Requirements of Finanstilsynet under Basel II
NOTICE: Where references are made to documents published by Finanstilsynet , those documents are mostly only available in Norwegian.
The importance of supervisory transparency and accountability has been stressed by the Basel Committee on Banking Supervision and by the new European Community legislation, namely the Capital Requirements Directive (CRD), which is comprised of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast), and Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast) . Article 144 of Directive 2006/48/EC stipulates explicit disclosure requirements for national supervisory authorities. According to article 37 of Directive 2006/49/EC, these disclosure requirements apply to the to the supervision of investment firms as well.
To ensure uniformity and comparability of the disclosed information, the Committee of European Banking Supervisors (CEBS) has developed a standardised web-based supervisory disclosure framework and published general guidelines on the implementation of the framework (CEBS Guidelines on Supervisory Disclosure).
The website of the European Banking Authority (EBA) will serve as a centralised electronic repository and will allow for quick and easy comparison of the relevant information. The websites of the national competent authorities will provide the exhaustive and detailed information required by the CRD. This two level approach shall increase the transparency and comparability of the data and information disclosed.
To comply with its supervisory disclosure requirements, Finanstilsynet has created a special area within its website. In analogy with the provisions of Article 144 of Directive 2006/48/EC, the content of the supervisory disclosure requirements has been divided into four sections:
A. Rules and guidance
- Texts of laws and regulations adopting the Basel II provisions within Directive 2006/48/EC and Directive 2006/49/EC in Norway. The texts outline the basic legislative and regulatory framework for credit institutions and investment firms subject to supervision by Finanstilsynet.
- Administrative rules refer to documents that instruct supervised entities on how to satisfy minimum regulatory standards and are published in the form of circulars.
- General guidance includes information on how laws and regulations should be applied by institutions. This includes discussion papers submitted by the Ministry of Finance. Additionally, general guidance will cover any other relevant information that Finanstilsynet wishes to release to enhance the understanding of the new capital adequacy framework.
B. Options and national discretions
- The Directives 2006/48/EC and 2006/49/EC contain a certain number of legal options and national discretions which may be exercised by the supervised institutions, or the national supervisory authorities.
C. Supervisory review
- This section covers the general criteria and methodologies used by Finanstilsynet in the Supervisory Review and Evaluation Process (SREP), minimum requirements for institutions' own Internal Capital Adequacy Assessment Process (ICAAP) and policies on supervisory measures with respect to specific circumstances or institutions. Finanstilsynet has developed risk modules for supervising institutions. These modules are made public.
D. Statistical data
- This section includes aggregate statistical data on key aspects of the implementation of Basel II in Norway. The disclosed tables comprise information on the Norwegian banking sector, credit risk, operational risk, market risk as well as limited information on supervisory actions and measures. In this section, Finanstilsynet may omit one or more items of information, if those items include information which is regarded as proprietary or confidential.
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