What are the national authorities for banking regulation, supervision and resolution in your jurisdiction?
Banking & Finance (2nd edition)
The main national authority for banking regulation and supervision in Israel is the Bank of Israel (the "BoI"), which regulates and supervises the licensing applicable to banking entities in Israel, subject to the Israeli Banking Law (License), 1981 ("The Banking Law"). Other laws which regulate the activity of banks in Israel are: The Banking Ordinance, 1941 ("The Banking Ordinance") and The Banking Law (Service to Customer), 1981 ("The Banking Law (Service to Customer)").
In addition, there are other banking activities in Israel which are regulated and supervised by two other authorities: Investment Advice Investment Marketing and Portfolio Management activities are regulated by the Israeli Securities Authority (the "ISA"); while some Financial Assets Services and the non - banking Credit Extension are regulated by the Israeli Capital Market, Insurance and Savings Authority (the "CMISA").
The Austrian Financial Market Authority (“FMA”) is established as an integrated supervisory institution, supervising all financial service providers in Austria. The FMA shares responsibilities with the Oesterreichische Nationalbank (“OeNB”) in connection with banking supervision. While the OeNB is in charge of fact-finding, including on-site and off-site analysis of banks, the FMA is tasked with decision-making and has therefore been empowered as the competent authority in the area of banking supervision and banking recovery and resolution. The European Central Bank (“ECB”) is responsible for banking supervision in the Euro area under the Single Supervisory Mechanism (“SSM”) and supervises significant entities in Austria, in conjunction with the FMA as the national competent authority (“NCA”) and the OeNB.
The national authority for banking regulation, supervision and resolution in the Republic of Cyprus is the Central Bank of Cyprus (“CBC’’) . The CBC is governed by the Central Bank of Cyprus Law 2002, as amended (‘’CBC Law’’). The CBC Law specifies the main responsibilities of the CBC in relation to banking regulation in the Republic of Cyprus. Since Cyprus is part of the Eurozone since November 2014 (and as such part of the Single Supervisory Mechanism (“SSM”)), the European Central Bank (“ECB") assumed a number of tasks concerning policies relating to the prudential supervision of credit institutions established in SSM participating member states, which have been conferred on it by the Council Regulation (EU) No 1024/2013. These include the task of authorisation of credit institutions within the SSM.
The supervision of banking activities in Finland is divided between the European Central Bank (ECB), the European Banking Authority (EBA) and the Finnish Financial Supervisory Authority (FFSA). The ECB monitors developments in the EU banking sector and addresses possible systemic risks in the financial system through macroprudential policies. Regulation (EU) 1024/2013 on the single supervisory mechanism (the SSM Regulation) confers specific tasks on the ECB related to the prudential supervision of credit institutions. Together with national supervisory authorities, the ECB directly supervises globally systemically important institutions (G-SIIs) considered as significant based on their size, economic importance, cross-border activity or direct public financial assistance. The EBA works to ensure effective and consistent prudential regulation and supervision across the European banking sector in order to maintain financial stability, efficiency and orderly functioning of the banking sector.
The main task of EBA is to provide harmonised prudential rules for financial institutions throughout the EU and promote convergence of supervisory practices in the EU banking sector.
The primary supervisory responsibility for other banks and credit institutions lies with the FFSA. The functions of the FFSA are aimed at safeguarding financial stability and the stable operation of credit institutions and other supervised entities and ensuring adherence to good market practices in order to maintain confidence in the financial markets. The FFSA also decides on capital buffers and holds administrative sanctioning powers with respect to breaches against the Finnish Act on Credit Institutions (610/2014, as amended). The FFSA engages in international co-operation in the field of regulation and supervision and is a member of the single supervisory mechanism that comprises the ECB and the national competent authorities of the participating EU countries.
The Finnish Financial Stability Authority operates as Finland's national resolution authority. It is responsible for resolution planning concerning credit institutions and investment firms, and for decision making relating to the reorganisation of institutions experiencing financial difficulties. The Financial Stability Authority also maintains the Finnish deposit guarantee scheme.
The activities of the Finnish central bank, the Bank of Finland, include four core tasks:
- Monetary policy and research;
- Financial supervision;
- Banking operations; and
- Maintenance of currency supply.
The Bank of Finland oversees the financial and economic system. It implements the European monetary policy in Finland through its own monetary policy operations, and safeguards the domestic financial system's liquidity management and manages payment transfers between banks.
The Finnish Financial Ombudsman Bureau provides advisory services to individuals and small enterprises free of charge in the fields of banking, insurance and securities.
The Finnish Consumer Agency monitors laws protecting consumers in the market while the Consumer Adviser, operating in connection with the Finnish Consumer Agency, provides advisory and mediation services to consumers also in the field of retail banking services.
In addition to the European regulator, ECB, there are two main national authorities for banking regulation, supervision and resolution in France:
- the Autorité de contrôle prudentiel et de resolution (“ACPR”) is responsible for the supervi-sion of the banking and insurance sectors. It insures the stability of the financial system and the protection of the customers ; ACPR conducts investigations and issues sanctions.
- the Autorité des Marchés Financiers (“AMF”) regulates participants and products in France’s financial markets. It regulates, authorises, monitors, and, where necessary conducts investiga-tions and issues sanctions. In addition, it ensures that investors receive material information, and provides a mediation service to assist them in disputes.
- Other national authorities could also act against banks and financial institutions as for example the “Auto-rité de la Concurrence” (anti-competition agency).
There are five lead national authorities for the regulation of banking sector in the Republic of Turkey (“Turkey”); the Central Bank of Turkey (the “CBRT”); the Banking Regulation and Supervision Agency (the “BRSA”) and the Banking Regulatory and Supervision Board (“BRSB”) as the decision-making authority of BRSA; the Saving Deposits Insurance Fund of Turkey (the “SDIFM”); the Capital Markets Board (the “CMB”) and the Financial Crimes Investigation Board (“FCIB”).
Other national regulatory authorities that also oversee the relevant aspects of banking activities in Turkey are as follows:
(i) The Competition Board;
(ii) The Data Protection Board;
(iii) The Consumer Protection Board;
(iv) Revenue Administration; and
(v) Ministry of Treasury and Finance.
National authorities listed above under Section A, the CBRT, BRSA, CMB and FCIB being primary authorities, are also supervisory authorities for banks and financial institutions in Turkey, relating to specific matters such as cross-border lending transactions, money laundering and financing of terrorism, KYC requirements, data protection and Basel compliance.
The SDIF is a public legal entity which has a unique role in execution and bankruptcy proceedings of banks in Turkey and been granted with exceptional powers. As such, the SDIF is authorized to take over the management and audit banks whose operation permit has been revoked due to insolvency reasons and fulfill the necessary operations for financial restructuring or the bankruptcy and liquidation of the same.
The main authority for banking regulation and supervision in the Federal Republic of Germany
(“Germany”) is the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – “BaFin”). Effective 1 January 2018 BaFin also became the German National Resolution Authority (NRA). Further, the German Central Bank (Bundesbank) is cooperating with BaFin on certain elements of banking supervision. In addition, it should be noted that the European Central Bank (“ECB”) is directly responsible for the supervision of “significant banks” resident in Germany. As a result of the Single Supervisory Mechanism (SSM). The ECB also oversees less significant banks indirectly.
In Switzerland, the primary regulator for supervising the financial market and its participants as well as certain products is the Swiss Financial Market Supervisory Authority FINMA (FINMA). FINMA also acts as rule maker where federal acts or their implementing ordinances delegate such power to FINMA, and acts as resolution authority in restructuring or liquidation proceedings of Swiss banks and securities dealers. The Swiss National Bank (SNB) is entrusted with the task to ensure the stability of the Swiss financial market – including the task commonly referred to as the macro-prudential supervision.
The main national authority for banking regulation and supervision in the Slovak Republic is Slovak cen-tral bank (in Slovak Národná banka Slovenska) (hereinafter “NBS”) which acts as main regulatory and supervisory authority in the financial sector.
In accordance with the Financial Market Supervision Act (the “FMSA”) and the Act on Banks (the “AOB”), NBS supervises financial market participants active in the banking, capital market, insurance and pension fund sectors. The FMSA regulates general rules of procedure for supervision of the financial market and the AOB provides general competences to NBS as well as general provisions regarding supervision.
Another authority, known as the Resolution Council (in Slovak: Rada pre riešenie krízových situácií) which was established on the 1 January 2015, plays a role in financial regulation and supervision. The Resolu-tion Council exercises its competences over selected institutions which are for example: banks and in-vestments firms with registered capital at least EUR 730,000, financial holdings companies, mixed finan-cial holding companies established in Slovak Republic, their parents with registered office in the Slovak Republic, EU and mixed-activity, branches of selected institutions established in a third country. General objective of the Resolution Council is to prevent the failure of selected institutions or firms in the finan-cial sector and to avoid crisis on the financial markets.
The Monetary Authority of Singapore (“MAS”) operates as an integrated banking and financial services regulator.
The Financial Services Agency (FSA) has the authority under the Banking Act to regulate and supervise banks in Japan.
The resolution of failed banks is performed by the Deposit Insurance Corporation of Japan (DICJ), although the resolution commencement and methods are ordered by the FSA or the Prime Minister and deliberations by the Financial Crisis Response Council, consisting of the Prime Minister, the Minister of Finance, the Commissioner of the FSA and the Governor of the Bank of Japan, may be required, pursuant to the Deposit Insurance Act.
Pursuant to the Banking Law of Oman (issued by Royal Decree 114/2000 (as amended), the “Banking Law”), the Central Bank of Oman (the “CBO”), acting through its board of governors (the “Board”), has full authority to perform all acts required for the regulation, administration and supervision of banking busi-ness in Oman. The CBO’s powers are set out extensively and comprehensively in the Banking Law.
Additionally, banks engaged in investment banking activities will be subject to the regulations issued by the Capital Market Authority (the “CMA”) pursuant to the Capital Market Authority Law (RD 80/1998, the “CMAL”) and the Executive Regulations of the CMAL as amended from time to time (the “Executive Regulations”).
National Bank of Georgia (the “NBG”) is the national authority for banking regulation, supervision and resolution.
The main governmental authority relevant for financial regulation in Liechtenstein is the Ministry for General Government Affairs and Finance, and in particular the Office for International Financial Affairs (Stabsstelle für internationale Finanzplatzagenden, SIFA).
The local competent supervisory authority is the Financial Market Authority Liechtenstein (FMA). The legal mandate of the authority is to safeguard the stability and functioning of the Liechtenstein financial mar-ket, the protection of clients, the prevention of market abuse, and the implementation of and compliance with recognized international standards.
Under Article 42 of the Luxembourg law of 5 April 1993 on the financial sector, as amended (the "Financial Sector Law"), the national authority responsible for the supervision of banks in Luxembourg is the Commission de Surveillance du Secteur Financier (the "CSSF").
The CSSF, acting via its resolution council, is also the national resolution authority of Luxembourg (point 4. of Article 59-15 of the Financial Sector Law implementing directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms, the "BRRD").
Banking regulation in Luxembourg comprises an array of different legislative acts. Apart from the European regulations and various Level 2 and Level 3 European measures, the local legislation is passed by the Luxembourg parliament (Chambre des députés) as laws (lois) and can be accompanied by more granular measures, the grand ducal regulations (règlements grand-ducaux). The CSSF issues regulations (règlement de la CSSF) and guidance, the latter often in the form of circulars (circulaires).
Banco de Portugal (www.bportugal.pt) is the national competent authority for banking regulation, over-sight and resolution.
The Malta Financial Services Authority (“MFSA”) is the national competent authority supervising credit institutions in Malta. Following the transposition of the Bank Recovery and Resolution Directive (Directive 2014/59/EU) (“BRRD”), the Board of Governors of the MFSA also acts as the Resolution Authority and has appointed a Resolution Committee which has all powers assigned to it by virtue of the domestic Recovery and Resolution Regulations (S.L. 330.09). Moreover, the Financial Intelligence Analysis Unit (“FIAU”), also plays a part in banking supervision, namely with respect to anti-money laundering related powers. To this effect, it has the core powers of receipt and analysis of financial reports made by subject persons performing the business of banking, on transactions suspected of involving money laundering, co-operating and exchanging information with local and foreign supervisory authorities and foreign investigation units, as well as monitoring and ensuring compliance by such subject persons with their obligations in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations (S.L. 373.01).
The Qatar Central Bank (the “Central Bank” or “QCB”) has been empowered to enforce policies related to the regulation and supervision of financial services activities (i.e., banks) in Qatar. In-deed, Article 5 of Law No. 13 of 2012 issuing the Qatar Central Bank Law and the Regulation of Financial Institutions (the “QCB Law”) mentions the scope of powers of the Central Bank, which shall aim at assisting in the development and support of the national economy to achieve the fol-lowing:
- Maintaining the value of the currency and securing monetary stability;
- Acting as a higher regulatory, control and supervisory body for all services, businesses, markets and financial activities in or through the State, in accordance with the best international standards and practices;
- Founding a services, business, markets and financial activities sector that is based on the rules of the market and enjoys stability, transparency, competitiveness and good governance.
- Enhancing public confidence in the State as a leading global hub for services, business, markets and financial activities
- Ensuring orderly development of the services, business, markets and financial activities sector in line with the objectives of both the economic and overall development of the State
Furthermore, Article 7 of the QCB Law provides, inter alia, that the Central Bank shall, in the con-text of the vision of the national strategy and according to the best international standards and practices, develop and implement the State's monetary policy, exchange rate policies and policies relating to regulation, control and supervision of financial services and activities in the State.
To that effect, Paragraph 9 of the same article of the QCB Law provides that the Central Bank shall in particular issue licences to financial institutions to practice financial services, business and activities, oversight and supervise the same in accordance with the provisions of this Law and its implementing resolutions.
In this respect, financial institutions is defined under Article 1 of the QCB Law as any bank, insur-ance, reinsurance, investment, finance, exchange house, representation office, or external unit, and other financial institutions as determined and regulated by a decision of the Central Bank, and which shall be licensed in accordance with the provisions of this Law to practice all or some of the aforementioned activities, as determined by the Central Bank
Banking regulation, supervision and resolution are overseen by the National Bank of Romania (NBR), which is the central bank of Romania. The NBR controls, monitors and supervises credit institutions, electronic money institutions, non-banking financial institutions (NBFIs) and payment institutions. These NBR activities include the licencing of credit institutions, electronic money institutions, NBFIs and payment institutions, and the prudential supervision thereof and resolution.
The Financial Supervisory Authority (FSA) is responsible for authorizing investment services companies that carry out the investment services and the auxiliary investment services prescribed by Annex 1 of Law no. 126/2018 on the markets for financial instruments, which transposes EU Directive 2014/65/EU (MiFID II). Credit institutions must be authorized by the NBR to carry out such services, and credit institutions that carry out investment services covered by Law no. 126/2018 or CNVM Reg. 32/2006 must be registered in the FSA register. The general rule is that the FSA supervises the application of Law no. 126/2018, EU Reg. no. 600/2014 (MiFIR) and the legal framework of MiFID II in Romania. The main exception to this supervisory scope is that the NBR supervises and regulates the carrying out of investment services by credit institutions realized through certain specified financial instruments that are not traded on a regulated market (e.g. money market instruments and government securities) (art. 2(1)-(4), Law no. 126/2018).
In our jurisdiction the National Bank of Serbia (NBS), Deposit Insurance Agency, and the Securities Com-mission are the national authorities for banking regulation, supervision and resolution.
The Financial Conduct Authority (FCA) is the conduct regulator for firms providing financial products and services in both retail and wholesale markets, and also the prudential regulator for many firms. It is also responsible for enforcing the market abuse and listing regimes.
The Prudential Regulation Authority (PRA) is responsible for the prudential regulation of systemically important financial institutions, including banks, building societies, insurers and major investment firms.
The Bank Recovery and Resolution Directive (BRRD) establishes a common approach within the European Union (EU) to the recovery and resolution of banks and investment firms. The Bank of England is the resolution authority in the United Kingdom for the purposes of BRRD.
In addition, the UK’s own special resolution regime provides the Bank of England, the Prudential Regulation Authority, the Financial Conduct Authority and the Treasury with tools to protect financial stability by managing the failure of financial sector firms.
Regulation of banks in the US is divided between the federal government and the states, marked by a deep history and patchwork of federal legislation that has developed since 1863 and gradually eroded, but not extinguished, state authority. This dual responsibility, sometimes called ‘dual regulation,’ significantly complicates any effort to understand the regulation of banks in the US. Both because federal law is supreme in its area of competence and because of an extraordinary expansion of the scope of the federal regulation of banking that has occurred in response to episodic crises affecting depository institutions, federal law is today the most important element of dual regulation.
There are three federal banking regulators primarily responsible for supervising banking organizations in the US at the federal level: the Office of the Comptroller of the Currency, an independent division of the US Department of the Treasury (OCC); the Board of Governors of the Federal Reserve System (FRB), which is an independent agency and the central bank of the US; and the Federal Deposit Insurance Corporation, an independent agency that also is responsible for the insurance of deposits maintained by banking organizations (FDIC).
The Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) with the objective of consolidating within a single agency consumer financial protection authority that had previously been dispersed across multiple financial regulators. The CFPB’s primary functions include issuing and amending regulations to implement various federal consumer financial protection statutes, pursuing enforcement actions under those laws and regulations, and developing consumer education initiatives.
There are essentially two kinds of commercial banking organizations in the US: national banks, which are chartered by the OCC under federal law, and state banks, which are chartered by the applicable state banking supervisor under state law. All national banks that accept deposits are required to have deposit insurance from the FDIC and to be members of the Federal Reserve System, which is administered by the FRB. All state banks that accept deposits are required to have deposit insurance from the FDIC. State banks may, with the permission of the FRB, become members of the Federal Reserve System. Other types of depository institutions include mutual and stock-form savings banks, credit unions and savings associations.
The principal federal supervisor of national banks is the OCC. The OCC has the power both to regulate and to examine the activities of national banks. Although national banks are subject to generally applicable state laws, national bank powers may not be expanded by the states and, because federal law is paramount, many state laws that purport to restrict the exercise of banking power have only limited effect on national banks. The states may not examine the general conduct of banking activities by national banks.
While the principal regulator of state banks is the appropriate state regulator, each FDIC-insured state bank also has a principal federal regulator. If a state bank is a member of the Federal Reserve System (such banks are referred to as ‘state member banks’), its principal federal regulator is the FRB. If an FDIC-insured state bank is not a member of the Federal Reserve System (such banks, which as a group tend to consist of smaller banking organizations, are called ‘state nonmember banks’), its principal federal regulator is the FDIC.
National banks and state member banks, as members of the Federal Reserve System, are subject to regulation under the Federal Reserve Act. The Federal Reserve System, comprised of twelve regional Reserve Banks, is subject to regulation and supervision by the FRB. Several provisions of the Federal Reserve Act relating to safety and soundness have been made applicable to state nonmember banks as well.
All FDIC-insured banks, state or national, are also subject to regulation by the FDIC to the extent necessary to protect the deposit insurance system.
As is described in greater detail in Question 22, the FDIC is primarily responsible for the resolution of banks under the Federal Deposit Insurance Act (FDIA) and systemically important banking organizations under the Orderly Liquidation Authority.
Bank Holding Company Regulation
Most larger banking organizations in the US are organized as banking holding companies, in which one or more banks and various permitted nonbank companies are held under a common holding company that is supervised and regulated by the FRB under the Bank Holding Company Act of 1956 (BHC Act).
Concern about the economic power of banking organizations, particularly when associated with general commercial activity, has been a continuing popular concern in the US. The BHC Act was enacted to help address concerns with respect to perceived increases in the concentration of financial resources in bank holding company systems, geographic expansion of bank holding companies that appeared to threaten state regulation and local control of financial institutions, and the affiliation of banks with nonbanking companies, which was believed to threaten credit allocation and other unsound and unfair banking practices.
Any company intending, directly or indirectly, to acquire control of a state or national bank must obtain the prior approval of the FRB under the BHC Act. Furthermore, any company that directly or indirectly controls a bank, must, with few exceptions, obtain approval of the FRB prior to acquiring more than 5% of any nonbanking company, and may acquire only companies that engage only in activities that are so closely related to banking as to be a proper incident thereto. Consequently, any company, including a foreign bank, acquiring a US bank is subject to significant federal regulation of its activities and investments in the US.
Data concerning regulated bank holding companies, banks and affiliates in the US is available from the National Information Center:
The main national authorities for banking regulation, supervision and resolution in Italy are:
(i) the Bank of Italy, which is responsible of the banking and financial supervision on banks and non-banking intermediaries enrolled in specific registers. Since November 2014, banking super-vision has been carried out within the framework of the Single Supervisory Mechanism (“SSM”);
(ii) the Minister of Economy and Finance (“MEF”), which carries out the tasks and the responsibili-ties of the State in the fields of economic policy, financial policy, budgeting, and tax policies. Additionally, it carries out all activities related to the coordination of public spending and its oversight, planning of public investments, monitoring and oversight of public financial man-agement, public debt management, and of State stockholdings. The MEF mainly resolves on the application of certain principles and provisions set forth under the Legislative Decree no. 385 of 1 September 1993, (“Italian Banking Law” - e.g. on the notion of reserved banking and fi-nancial activity);
(iii) the Interministerial Committee for Credit and Savings (Comitato Interministeriale per il Credito e il Risparmio - “CICR”), which has the task of the high supervision on credit and savings. The CICR resolves, on proposal of the Bank of Italy, principles and criteria for the exercise of the supervi-sion.
In addition, it should be noted that also as a result of the SSM, the European Central Bank (“ECB”) is direct-ly responsible for the supervision of Italian “significant banks”.
The Bank of Thailand (“BoT”) is the main national authority that supervises, examines, and analyzes the financial status and performance, and risk management system of the financial institutions, as empow-ered by the Minister of Finance (“Minister”) under the Financial Institutions Businesses Act B.E. 2551 (A.D. 2008), as amended (“FIB Act”).
In Slovenian jurisdiction the competent national authorities for banking regulation are the National Assembly, the Bank of Slovenia and the Ministry of Finance. Bank of Slovenia is also responsible for supervision and resolution.