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Joint Forum

The Joint Forum was established in 1996 under the aegis of the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) to deal with issues common to the banking, securities and insurance sectors, including the regulation of financial conglomerates.The Joint Forum has completed its mandate and has been disbanded.  

The Joint Forum comprised an equal number of senior insurance, bank and securities supervisors representing each supervisory constituency. Thirteen countries were represented in the Joint Forum: Australia, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. The EU Commission attended in an observer capacity.

The Chairmanship rotated between the three parent organisations and was named for a two-year term.

The Joint Forum was a group of senior financial sector supervisors working under the auspices of its parent committees: the Basel Committee on Banking Supervision; the International Organization of Securities Commissions and the International Association of Insurance Supervisors (the Parent Committees).

The objective of the Joint Forum was to support banking, insurance and securities supervisors in meeting their regulatory and supervisory objectives and, more broadly, to contribute to the international regulatory agenda in particular where risks exist across or in gaps between the three supervised sectors.

In order to achieve this objective, the Joint Forum:
 
  • addressed and promoted understanding of issues common to the banking, securities and insurance sectors, including the supervision of financial conglomerates;
     
  • analysed cross-sectoral market and regulatory developments;
     
  • examined cross-sectoral gaps and conflicts in regulation and supervision;
     
  • developed guidance and principles and/or identified best practices on cross-sectoral technical, regulatory and/or policy issues to encourage cross-sectoral consistency and alignment where appropriate, and reduce opportunities for regulatory arbitrage; and
     
  • facilitated cooperation, coordination and information sharing among banking, insurance and securities supervisors (or representatives of the Parent Committees) and further supported the Parent Committees by identifying synergies or duplication in their work efforts.

The Joint Forum undertook a work plan and mandates, endorsed by the Parent Committees, that were consistent with and reflected Parent Committee priorities. In doing so, the Joint Forum engaged with other international bodies, industry and the broader supervisory community.
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  • Intra-group Transactions and Exposures (ITE) and Risk Concentrations (RC) Principles

    The Joint Forum, as part of its initial mandate to work towards the development of principles for the future supervision of financial conglomerates, drafted principles to address supervisory approaches to intra-group transactions and exposures (ITE)and risk concentrations (RC). These principles, have been adopted by the Joint Forum's parent organisations after consultation with industry and supervisors, and complement the Joint Forum's already published documents on supervision of financial conglomerates, issued in February 1999.

    Since financial conglomerates manage RCs and ITEs as part of the overall risk management process, the Joint Forum has sought to develop principles that reflect the rapid pace of evolution in risk management practices by identifying and drawing on progressive risk management practices. While the proposed principles can be applied by supervisors in the near term, as a practical matter, many financial conglomerates are still developing group-wide risk management approaches that would meet the expectations set out in these documents. The papers also set out the findings of a study carried out by the Joint Forum of the supervisory practices in the countries represented on the Forum and the practices of 10 major international financial conglomerates in relation to ITEs and RCs.

  • February 1999 papers

    The papers below have arisen from intensive study of 14 major international conglomerates and from extensive consultation with industry and the wider supervisory community. The international supervisory community is moving steadfastly to meet the challenges posed by the emergence of financial conglomerates. Basel Committee, the IAIS and IOSCO have urged their members to implement the principles set out in the papers.

  • Capital Adequacy Principles

    • Capiral adequacy principles
      File modified: 03/11/2014 | File size: 91 KB
      This paper outlines measurement techniques and principles to facilitate the assessment of capital adequacy on a group-wide basis for financial conglomerates. The measurement techniques are based on a combination of existing approaches used by various supervisors and yield broadly equivalent results. The paper does not promote a single technique for universal application but rather builds on the existing sectoral approaches. The guiding principles address particular issues that should be identified in assessing the capital adequacy of financial conglomerates on a group-wide basis and are intended to assist supervisors in the exercise of discretion so that the result will be within a range of acceptable outcomes.

  • Supplement to the Capital Adequacy Principles

    • Supplement to the capital adequacy principles
      File modified: 03/11/2014 | File size: 38 KB
      Consists of theoretical examples constructed to illustrate and describe complex situations that can arise in practical applications of the measurement techniques.

  • Fit and Proper Principles

    • Fit and proper principles
      File modified: 03/11/2014 | File size: 18 KB
      Recognising that the probity and competence of the top management of banks, securities firms and insurance enterprises are critical to the objectives of supervision, this paper provides guidance intended to ensure that supervisors of entities within a financial conglomerate are able to assess whether those entities are soundly and prudently managed. Further, the paper promotes arrangements to facilitate consultation and information exchange between supervisors, with respect to individuals and regulated entities.

  • Framework for Supervisory Information Sharing

  • Coordinator Paper

    • Coordinator paper
      File modified: 03/11/2014 | File size: 29 KB
      Provides supervisors with guidance on the possible identification of a coordinator/coordinators and a catalogue of coordination elements from which supervisors can select the role and responsibilities of a coordinator/coordinators in emergency and non-emergency situations.

  • Supervisory Questionnaire

    • Supervisory questionnaire
      File modified: 03/11/2014 | File size: 16 KB
      Developed and used by the Task Force to assist supervisors in gaining a better understanding of each others' objectives and practices. The continuing work of the Joint Forum and experience gained in using the Questionnaire may result in changes to enhance its coverage, to improve its understanding of supervisors' objectives and practices and to facilitate the exchange of information on financial conglomerates.
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