BIS' Coelho/Guerra: Under pressure: taking stock of supervisory resources

22 March 2024

Effective banking supervision relies on several factors, including authorities having relevant powers, operational independence, legal protection and the willingness to take timely actions. However, even if all these conditions are met, supervision will not be effective without adequate resources.

• The resources needed for banking supervision depend on factors such as financial system size, banks' business models, and the supervisor's mandate, perimeter and approach. The actual resources available for supervision, meanwhile, are limited by budgetary constraints and the availability of skilled professionals. Hence, actual resources often fall short of optimal levels.
• Jurisdictions with smaller banking systems as well as those where supervisory authorities are financially independent tend to have more resources. Conversely, banking supervisors overseeing major financial centres appear to be relatively more stretched than their counterparts elsewhere.

full paper

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