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Compliance with bank regulations is verified by personnel known as bank examiners. The objectives of bank regulation, and the emphasis, vary between jurisdictions. The most common objectives are: prudential—to reduce the level of risk to which bank creditors are exposed (i.e. to protect depositors) [7]
Central Bank of Aruba: Australia: Australian Prudential Regulation Authority (APRA) ; Australian Securities and Investments Commission (ASIC) ; Australian Financial Complaints Authority (AFCA) Austria: European Central Bank through European Banking Supervision ; Financial Market Authority (FMA) Azerbaijan
The Prudential Regulation Authority (PRA) is a United Kingdom financial services regulatory body, formed as one of the successors to the Financial Services Authority (FSA). [ 1 ] [ 2 ] [ 3 ] The authority is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms.
Bank examiners are generally employed to supervise banks and to ensure compliance with regulations. U.S. banking regulation addresses privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism, anti-usury lending, and the promotion of lending to lower-income
These remaining reforms to prudential regulation of banks are known by various names in BCBS member jurisdictions (often including other Basel III reforms that remain to be implemented – in particular, FRTB). In the US, implementation of these reforms is the main part of what is being called the Basel III "Endgame".
Basel III requires banks to have a minimum CET1 ratio (Common Tier 1 capital divided by risk-weighted assets (RWAs)) at all times of: . 4.5%; Plus: A mandatory "capital conservation buffer" or "stress capital buffer requirement", equivalent to at least 2.5% of risk-weighted assets, but could be higher based on results from stress tests, as determined by national regulators.
The fact is, banks do benefit from implicit and explicit government safety nets. Investing in a bank is perceived as a safe bet. Without proper capital regulation, banks can operate in the marketplace with little or no capital. And governments and deposit insurers end up holding the bag, bearing much of the risk and cost of failure.
The committee expanded its membership in 2009 and then again in 2014. As of 2019, the BCBS has 45 members from 28 jurisdictions, consisting of central banks and authorities with responsibility of banking regulation. [3] The committee agrees on standards for bank capital, liquidity and funding. Those standards are non-binding high-level principles.