01 November 2001

Risk Management: Practices and Regulatory Capital - Cross-Sectoral Comparison

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Risk Management Practices and Regulatory Capital - Cross-Sectoral Comparison, Report of the Joint Forum (IOSCO, Basle Committee, IAIS) The Joint Forum of banking, securities, and insurance supervisors has been working to enhance mutual understanding of issues related to the supervision of firms operating in each of the respective sectors. These efforts reflect the development of financial conglomerates, the increasing globalization of financial markets and the development of new financial instruments. This report responds to the parent committees’ request to compare approaches to risk management and capital regulation across the three sectors and was developed by a working group of the Joint Forum with membership from supervisors in all three sectors.
It has been found that while there is convergence between the sectors in various respects, there still remain significant differences in the core business activities and the risk management tools that are applied to these activities. There are also significant differences in the regulatory capital frameworks, in many cases reflecting differences in the underlying businesses and in supervisory approaches.
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