Subject and objectives
Why is it necessary to regulate banks’ activities?
To prevent risky behavior, bank failures, and financial crises.
What is the main purpose of banking supervision?
To ensure that banks operate safely and soundly through ongoing monitoring and regulation.
What are the two main types of supervision methods used by the Central Bank?
On-site examination and off-site surveillance.
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What are the three main models of organizing banking supervision?
Institutional (Fragmented), Unified (Integrated), and Functional (Twin Peaks) models.
What is the main goal of state supervision of banking activities?
To ensure the stability and reliability of the banking system and protect depositors and creditors.
What are the two main stages of the Central Bank’s supervisory planning process?
Strategic planning and operational planning.
What is the purpose of off-site surveillance?
To analyze banks’ periodic reports to ensure compliance with prudential regulations and detect early warning signs of problems.
What is the main purpose of on-site inspections in banking supervision?
To verify the accuracy of reported information and assess a bank’s real condition directly at its premises.
What is the key feature of the Institutional (Fragmented) model?
Different agencies supervise different sectors — e.g., separate regulators for banks, insurance, and securities.
Who is responsible for a bank’s success or failure — the supervisor or the management?
The bank’s directors and management are responsible; the supervisor only analyzes and verifies its condition.
What are the two types of supervisory measures the Central Bank can take?
Enforcement and sanctions.
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What aspects of a bank do inspections analyze in depth?
Risks, internal control systems, business models, and governance.
Which model centralizes all financial supervision in one authority, and name a country that uses it?
The Unified (Integrated) model — used in Switzerland, Germany, and Singapore.
What is the role of internal and external audits in bank supervision?
Internal audit checks internal controls; external audit ensures financial statements are true and fair — both support supervision but don’t manage the bank.
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What are the three main types of supervision approaches?
Transaction-Based, Consolidated, and Risk-Based Supervision.
In the CAMELS rating system, what does each letter stand for?
Capital Adequacy, Asset Quality, Management Quality, Earnings, Liquidity, Sensitivity to Market Risk.
In the Twin Peaks model, what are the two “peaks,” and what is each responsible for?
Prudential supervision ensures financial stability; Conduct supervision protects consumers and market fairness.
Name three main tools or sources the Central Bank uses for effective supervision.
Internal reports and risk analyses, on-site inspections, and information from external auditors or market data.
How do monetary and macroprudential policies contribute to financial stability?
Monetary policy manages inflation and interest rates; macroprudential policy prevents systemic risks and builds buffers against financial shocks.
How do modern technologies like SupTech and RegTech improve banking supervision?
SupTech helps supervisors detect risks using AI and data analytics; RegTech helps banks automate compliance and reporting, making supervision faster and more accurate.
What’s faster — Wi-Fi at home or students running to class when the teacher says “5 минутта нб кояман”?
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What makes the Swiss FINMA model strong?
Independence, integration, risk-based approach, and strong cooperation with SNB.