Get documents about "Italy Bank Loan
W
Description
Italy Bank Loan document sample
Document Sample
Question Italy
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses? The Bank of Italy
1.1.1 Is there more than one body/agency that grants licenses to banks? No
Is more than one license required (e.g., one for each banking activity, such as Yes (one for banking and one for
1.1.2
commercial banking, securities operations, insurance, etc.)? securities operations)
As of December 2001 there were
830 commercial banks operating
1.2 How many commercial banks were there at year-end 2001?
in Italy (including foreign
branches).
1.2.1 What are the total assets of all commercial banks at year-end 2001? 1,905.741 mld euros
1.2.2 What are the total deposits of all commercial banks at year-end 2001? 796.1 mld euros
The minimum capital entry
requirement (for the granting of
banking licenses) amounts to
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3 Euro 6.3 million for banks
state which)
established as limited companies
and “banche popolari”, and Euro
2 million for mutual banks.
Yes for non EU subsidiaries and
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
branches.
Is it legally required that applicants submit information on the source of funds to be used
1.4 Yes
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5 Yes
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other Yes
1.7 Can initial disbursement of capital be done with borrowed funds? No
1.8.1 Draft by-laws? Yes
1.8.2 Intended organization chart? Yes
Financial projections for first
1.8.3 Yes
three years?
Financial information on main
1.8.4 Yes
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be Yes
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6 Yes
managers?
Sources of funds to be disbursed
1.8.7 Yes
in the capitalization of new bank?
Market differentiation intended
1.8.8 Yes
for the new bank?
109 applications for banking
In the past five years, how many applications for commercial banking licenses have licences have been received over
1.9
been received from domestic entities? the period from 1.1.1998 to
31.12.2002
23 applications have been denied
1.9.1 How many of those applications have been denied?
over the same period.
15 applications for commercial
In the past five years, how many banking licenses and acquisition
applications for commercial of domestic banks have been
In the past five years, how many applications for banking licenses have been received from foreign entities
1.10 commercial banking licenses have been received received from foreign entities? (EU branches are not included, as
from foreign entities? they do not need authorization).
How many of those applications
2
have been denied?
Number of applications from foreign entities to enter Received 2
1.10.1
through the acquisition of domestic bank? Denied 1
Number of applications from foreign entities to enter Received 11
1.10.2
through new, capitalized subsidiary? Denied 1
Question Italy
Number of applications from foreign entities to enter Received 2 (non EU)
1.10.3
through opening a branch? Denied 0
Number of applications from foreign entities to enter Received Not applicable
1.10.4
through some other means? Denied Not applicable
1.11.1 Capital amount or quality? Yes
1.11.2 Banking skills? Yes
1.11.3 Reputation? Yes
1.11.4 Incomplete application? Yes
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1? Problems related to the program
of activities to be submitted; non
1.11.5 Other reason(s). Please list. compliance with the principle of
separateness between industry
and finance.
1.12.1 Acquisition Not prohibited
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary Not prohibited
through
1.12.3 Branch Not prohibited
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner? No
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank? Yes
If yes, what are the maximum percentages associated with the total ownership by a There are no maximum
2.2.1
related party group (e.g., family, business associates, etc.)? percentages.
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks? Restricted
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial A negligible fraction.
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5 Permitted
commercial banks?
deposits is held by the five (5)
2.6.1 52.20%
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2 51.20%
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by 29.96%
3. Capital
3.1 What is the minimum capital-asset ratio requirement? 8%
3.1.1 Is this ratio risk weighted in line with the Basle guidelines? Yes
No; However the Banca d’Italia
has the power to impose higher
minimum capital requirements on
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk? banks, depending on their
technical situation, risk appetite,
loan portfolio quality,
management, etc..
3.3 Does the minimum ratio vary as a function of market risk? No
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the 0.6%, including market risk
3.4
1988 Basle Accord definitions? requirements
There is no official figure for
that; however it can be estimated
at 7.2%, by calculating the ratio
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
of the banking system’s
regulatory capital to on-balance
sheet total assets of the system.
3.5 Is subordinated debt allowable as part of capital? Yes
3.6 Is subordinated debt required as part of capital? No
Question Italy
Net unrealised revaluation gains
may be allowed as part of
supplementary capital up to 35%
3.7 What fraction of revaluation gains is allowed as part of capital?
of their amount provided that
they do not exceed 30% of core
capital.
50% or more government owned
3.8.1 10%
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2 5.70%
year-end 2001?
No, loans are not marked to
market. However the following
items are deducted:
a) loan losses related to country
Market value of loan losses not risk that are not realized in
3.9.1
realized in accounting books? accounting books;
3.9 Before minimum capital adequacy is determined, b) loan losses of substantial
which of the following are deducted from the book amount incurred after year-end
value of capital? results and interim results have
been published.
Yes, 50% of net unrealised losses
Unrealized losses in securities
3.9.2 in securities portfolios have to be
portfolios?
deducted.
Unrealized foreign exchange
3.9.3 No
losses?
No, accounting practices are
consistent with European Union
legislation. Where no specific
Are accounting practices for banks in accordance with International Accounting
3.10 provisions are laid down in the
Standards (IAS)?
relevant directives, IAS principles
are sometimes used (i.e. IAS 8,
IAS 12 and, partially, IAS 39).
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted No
4. Activities
4.1 Securities Unrestricted
4.2 Insurance Restricted
4.3 Real Estate Prohibited
4.4 Bank Owning Nonfinancial Firms Permitted
5. External Auditing Requirements
No, as a general rule. However
audit is compulsory for listed
companies and unlisted
companies controlled by listed
5.1 Is an external audit a compulsory obligation for banks?
companies; as consequence, audit
is compulsory for all listed banks
or banks whose parent company
is listed.
5.2 Are specific requirements for the extent or nature of the audit spelled out? Yes
5.3 Are auditors licensed or certified? Yes
5.4 Do supervisors get a copy of the auditor's report? Yes
Yes, external auditors to discuss
Does the supervisory agency have the right to meet with external auditors to discuss
5.5 their report without the approval
their report without the approval of the bank?
of the bank?
Yes, agency any presumed
Are auditors required by law to communicate directly to the supervisory agency any
involvement of bank directors or
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
senior managers in illicit
insider abuse?
activities, fraud, or insider abuse?
Question Italy
No, the Banca d’Italia cannot, but
the Italian Securities and
5.7 Can supervisors take legal action against external auditors for negligence?
Exchange Commission (Consob)
can, vis-à-vis listed companies.
5.8 Has legal action been taken against an auditor in the last 5 years? Yes, by Consob.
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1 Yes
structure?
6.2 Has this power been utilized in the last 5 years? N/A
7. Liquidity & Diversification Requirements
No, there are only concentration
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
limits vis-à-vis individual
7.1 (for example, are banks required to have some minimum diversification of loans among
borrowers or groups of connected
sectors, or are their sectoral concentration limits)?
borrowers (large exposure rules).
7.2 Are banks prohibited from making loans abroad? No
The only requirement is the
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank? minimum reserve requirement set
by the European Central Bank.
7.3.1 If so, what are these requirements? 2%
7.4 Do these reserves earn any interest? Yes
The average rate for the
refinancing operations carried out
7.4.1 What interest is paid on these reserves? by the European System of
Central Banks during the
maintenance period.
Are banks allowed to hold reserves in foreign denominated currencies or other foreign No
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign No
7.6
Question Italy
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency 11.50%
7.8 What percent of the commercial banking system’s liabilities is foreign-currency 14.50%
7.9 What percent of the commercial banking system’s assets is in central government bonds? 15.80%
7.10 What percent of the commercial banking system’s assets is funded with deposits? 44.80%
All deposits at Italian
What percent of the commercial banking system’s assets is funded with insured
7.10.1 incorporated banks have to be
deposits?
insured. See answer to 8.1.6.1
8. Depositor (Savings) Protection Schemes
Yes. According to the 1993
Banking Law two systems
operate at present: the Interbank
Is there an explicit deposit insurance protection system? If no, you may skip to question Fund for Protection of Deposits
8.1
8.2. If yes: (FITD) comprising all Italian
banks except for mutual banks;
the Mutual Bank Depositor
Guarantee Fund for mutual banks.
8.1.1 Is it funded by (check one) : the government, the banks, or both ? The banks
Only when there is a need (ex
8.1.2 Are premia collected
post)
Yes. The Italian protection
schemes, and the commercial
banks’ fund in particular, adjust
membership dues, which are
proportional to the member
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk? bank’s deposit base, depending
on risk, which is evaluated by a
system of indicators comprising
four areas (risk, solvency,
maturity transformation and
economic performance)
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets? It is not pre-funded
There is not a deposit insurance
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account limit per account
(in US$ and local currency)? There is not a deposit insurance
8.1.5.2 Domestic currency:
limit per account
8.1.6 Is there a limit per person? Yes
8.1.6.1 If yes, what is that limit (in domestic currency)? The limit is Euro 103,291
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of No
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits? Yes
8.1.9 Are interbank deposits covered? No
Yes. According to the 1993
Banking Law the decisions to
intervene a bank are made by the
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
funds’ governing bodies.
However, the intervention must
be authorised by the Bank of Italy.
8.1.10.1 If no, who does?
Question Italy
Yes. The funds’ governing bodies
may initiate expulsion
proceedings against a member
bank in cases of exceptionally
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11 serious violation of the Statutory
insurance for any participating bank?
obligations. The expulsion
proceedings initiate with the
assent of the Banca d'Italia; the
decision on t
On 30 June 2002 the 69 per cent
of total deposits of the members
bank of the Interbank Fund for
As a share of total assets, what is the value of large denominated debt liabilities of banks- Protection of Deposits (FITD),
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit and the 55 per cent of total
savings protection scheme? deposits of the members bank of
the Mutual Bank Depositor
Guarantee Fund, was excluded
from protect
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years? 28 small banks
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4 Yes, the last time a bank failed
bank failed?
In Italy, the beginning of a
compulsory liquidation procedure
is immediately followed by the
transfer of assets and liabilities of
8.4.1 On average, how long does it take to pay depositors in full?
the bank in liquidation to another
bank. This last one is responsible
for the liabilities of the resolved
bank. So no “time-
8.4.2 What was the longest that depositors had to wait in the last 5 years? 5 months
Yes. The 1993 Banking Law
allows the assignment of assets
and liabilities of the troubled
Were any deposits not explicitly covered by deposit insurance at the time of the failure
bank to a sound bank. Such a
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
solution allowed in fact the
procedures)?
payment of all depositors in every
case of liquidation in the last 5
years.
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other No
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or No
8.8 Are non-residents treated differently than residents with respect to deposit insurance No
(a) solely by the private sector Yes
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks? Yes
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ? Yes
the number of days a loan is in
No
arrears
a forward looking estimate of the
No
probability of default
Question Italy
Yes; “Non performing loans”
include: 1) “bad debts”; 2)
“substandard loans”; 3) “loans
being restructured”; 4)
“restructured loans”.
Bad debts are exposures vis-à-vis
persons that are insolvent or
equivalent (even where
insolvency has yet to be
ascertained by courts) regardless
of the bank’s forecast of loss.
Substandard loans - the
classification of a loan as
substandard is based on two
criteria a) a subjective criterion
which implies that the debtor’s
The primary system for loan classification is based difficulty in performing his
9.1.1
on (please pick one): contractual obligations is
considered to be temporary and it
Other
is expected to be solved in a
reasonable time; b) an objective
criterion, which refers to the
number and size of the overdue
installments. The latter criterion
is applied only when the loan
has not yet been classified as
substandard according to the
subjective criterion
The distinction between a bad
debt and substandard loan, is
made disregarding any collateral
or personal guarantee attached to
the loan. Exposures whose
impairment relates to country risk
are also excluded.
Loans being restructured - loans
are classified as being
restructured when the decision to
9.2.1 Sub-standard ? grant the restructuring is still
See 9.1.1.
9.2 After how many days is a loan in arrears
9.2.2 Doubtful? See 9.1.1.
classified as:
9.2.3 Loss? See 9.1.1.
There are no supervisory
9.3.1 Sub-standard ? minimum provisioning
requirements.
There are no supervisory
9.3 What is the minimum provisioning required as
9.3.2 Doubtful? minimum provisioning
loans become:
requirements.
There are no supervisory
9.3.3 Loss? minimum provisioning
requirements.
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001? 6.70%
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the Yes
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001? 2.20%
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001? 2.10%
What is the tax deductibility of provisions: Specific provisions can be
9.8 9.8.1. Specific provisions can be deducted deducted and general provisions
9.8.2 General provisions can be deducted can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1 Yes
loan is still performing?
Yes, only if and to the extent the
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1 bank judges that the overdue
loan is still non-performing?
interests can be collected.
10.2 After how many days in arrears must interest income accrual cease? N/A
Question Italy
10.3 Are financial institutions required to produce consolidated accounts covering all bank Yes
10.4 Are off-balance sheet items disclosed to supervisors? Yes
10.4.1 Are off-balance sheet items disclosed to the public? Yes
10.5 Must banks disclose their risk management procedures to the public? Yes
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading? Yes
Criminal and administrative
10.6.1 What are the penalties, if applicable?
sanctions
10.6.2 Have they been enforced? Yes
10.7 Do regulations require credit ratings for commercial banks? No
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g. All
There are no domestic rating
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
agencies
10.7.3.1 Bonds issuance? Yes
10.7.3.2 Commercial paper issuance? Yes
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds, Yes
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the No
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions, Yes
11.2 Can the supervisory agency order the bank's directors or management to constitute No
11.3.1 Dividends? No
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses? No
directors' decision to distribute:
11.3.3 Management fees? No
11.4 Have any such actions been taken in the last 5 years? No
11.5 Which laws address bank insolvency? The 1993 Banking Law
11.6.1 Bank supervisor No
11.6.2 Court Yes
11.6.3 Deposit insurance agency No
Bank restructuring or Asset
11.6.4 No
Management Agency
The Courts have the legal power
to declare the insolvency status.
However, the Bank of Italy,
independently form the Courts’
11.6 Who can legally declare - such that this declaration, can propose to the
declaration supersedes some of the rights of Minister of the Economy and
shareholders - that a bank is insolvent: Finance the compulsory
administrative liquidation of a
11.6.5 Other (please specify)
bank in each of the following
cases: exceptionally serious
violations of prudential
requirements, exceptionally
serious irregularities in the
bank’s administration,
exceptionally serious financial
losses.
11.7.1 Bank supervisor Yes
11.7.2 Court No
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency No
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank? No
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8 No. The actions are discretionary.
automatic actions (like intervention)?
11.9.1.1 Bank supervisor Yes
11.9.1.2 Court No
11.9.1.3 Deposit insurance agency No
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question Italy
Bank restructuring or Asset
11.9.1.4 No
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following: Supervisory authority can not
11.9.1 Supersede shareholder rights? expropriate the shareholders but
can only limit their rights in case
11.9.1.5 Other (please specify)
of special administration and
compulsory administrative
liquidation.
11.9.2.1 Bank supervisor Yes
11.9.2.2 Court No
11.9.2.3 Deposit insurance agency No
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4 No
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor No
11.9.3.2 Court No
11.9.3.3 Deposit insurance agency No
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4 No
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor Yes
11.9.4.2 Court No
11.9.4.3 Deposit insurance agency No
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4 No
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor No
11.9.5.2 Court No
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency No
insurance scheme? Bank restructuring or Asset
11.9.5.4 No
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
14
Number
Closure and liquidation:
Percentage of banking system 0.01
assets
Intervention and open bank
assistance: 24
Number
Intervention and open bank
assistance:
0.09
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each 27
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition: 0.02
Percentage of banking system
assets
The percentage above are on the
Other (please specify)
total of banking system deposits.
This questions are a duplicate of
questions of 11.10.1.
11.10.2.1 Closure and liquidation Respondenents were invited to
ignore them (your e-mail of
20.3.2003)
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question Italy
This questions are a duplicate of
questions of 11.10.1.
Intervention and open bank
11.10.2.2 Respondenents were invited to
11.10.2 What percentage of total bank assets did assistance
ignore them (your e-mail of
each of these resolution methods account for?
20.3.2003)
This questions are a duplicate of
Transfer of assets and liabilities questions of 11.10.1.
11.10.2.3 (incl. purchase and assumption) Respondenents were invited to
or merger and acquisition ignore them (your e-mail of
20.3.2003)
11.10.2.4 Other
The liquidation proceedings
generally take few days for the
resolution of the problem bank
with a transfer of asset and
liabilities to a sound bank. Then
the procedure carries on with the
assessment of the assets and
liabilities made by the
liquidators, the statement of
How many months did each of these resolution techniques take on average, from the
11.10.3 liabilities, the restitution and
moment of intervention by the responsible authority to the moment of resolution?
allotment of assets. The
requiring bank is responsible only
for liabiliites resulting from the
statement of liabilities only.
The 24 intervention proceedings,
out of 32 opened during the last
five years, that have already been
brought to an end, took on
average 13,6 months.
11.11.1 Bank supervisor Yes
11.11.2 Court No
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency No
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4 No
Management Agency
11.11.5 Other (Please Specify) No
11.12 Is court approval required for supervisory actions, such as superceding shareholder No
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation? No
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor? Yes
12. Supervision
The Bank of Italy is the only
12.1 What body/agency supervises banks? authority in charge of the
supervision of banks.
12.1.1 Is there more than one supervisory body? No
12.1.2 Is there a single financial supervisory agency for the financial sector? No
(a) the Prime Minister No
(b) the Finance Minister or other
No
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or No
12.2 Parliament or Congress
accountable?
Yes; Measures adopted by the
(d) other Bank of Italy can be appealed
against in administrative courts .
(a) the decision of the head of
government (e.g. President, Prime No
Minister)
(b) the decision of the Finance
Minister or other cabinet level No
authority
How is the head of the supervisory agency (and other
12.2.1
Question Italy
(c) a simple majority of a
legislative body (Parliament or No
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed? No
75%) of a legislative body
Yes; The Governor of the Bank
of Italy is appointed with a
resolution of the Bank of Italy’s
(e) other (Please specify)
Executive Board, with the
agreement of the President of the
Republic and the Prime Minister.
Does the head of the supervisory agency (and other directors) have a fixed term? No
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime No
Minister)
(b) the decision of the Finance
Minister or other cabinet level No
authority
(c) a simple majority of a
legislative body (Parliament or No
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by: No
75%) of a legislative body
The Governor of the Bank of Italy
can be removed only with a
resolution of the Bank of Italy’s
(e) other
Executive Board and with the
agreement of the President of the
Republic and the Prime Minister.
12.3 Are there important differences between what the supervisory agency is expected to do Yes
Banking supervision is exercised
by three departments of the Bank
of Italy’s central administration
(in Rome) and by the local
12.4 How many professional bank supervisors are there in total?
branches (one in each Italian
province). Excluding the
branhces, there are about 400
bank supervisors.
12.5 How many onsite examinations per bank were performed in the last five years? One inspection per bank
12.6 What is the total budget for supervision in local currency or dollars(please specify) in N/A
12.7 How frequently are onsite inspections conducted in large and medium size banks? Less frequently
12.8 How many of the total bank supervisors have more than 10 years of experience in bank N/A
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of N/A
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported? Yes
12.9.1 Are there mandatory actions in these cases? Yes
12.9.2 Who authorizes exceptions to such actions? No exceptions are applicable
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a Yes
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio in banks as of year-end 2001, using the
3.4
1988 Basle Accord definitions?
3.4.1 What is the actual capital ratio (i.e., not risk-adjusted) of banks as of year-end 2001?
3.5 Is subordinated debt allowable as part of capital?
3.6 Is subordinated debt required as part of capital?
Question
3.7 What fraction of revaluation gains is allowed as part of capital?
50% or more government owned
3.8.1
3.8 What fraction of the banking system's assets is in as of year-end 2001?
banks that are: 50% or more foreign owned as of
3.8.2
year-end 2001?
Market value of loan losses not
3.9.1
realized in accounting books?
3.9 Before minimum capital adequacy is determined,
which of the following are deducted from the book
value of capital?
Unrealized losses in securities
3.9.2
portfolios?
Unrealized foreign exchange
3.9.3
losses?
Are accounting practices for banks in accordance with International Accounting
3.10
Standards (IAS)?
3.11 Are accounting practices for banks in accordance with U.S. Generally Accepted
4. Activities
4.1 Securities
4.2 Insurance
4.3 Real Estate
4.4 Bank Owning Nonfinancial Firms
5. External Auditing Requirements
5.1 Is an external audit a compulsory obligation for banks?
5.2 Are specific requirements for the extent or nature of the audit spelled out?
5.3 Are auditors licensed or certified?
5.4 Do supervisors get a copy of the auditor's report?
Does the supervisory agency have the right to meet with external auditors to discuss
5.5
their report without the approval of the bank?
Are auditors required by law to communicate directly to the supervisory agency any
5.6 presumed involvement of bank directors or senior managers in illicit activities, fraud, or
insider abuse?
Question
5.7 Can supervisors take legal action against external auditors for negligence?
5.8 Has legal action been taken against an auditor in the last 5 years?
6. Internal Management/Organizational Requirements
Can the supervisory authority force a bank to change its internal organizational
6.1
structure?
6.2 Has this power been utilized in the last 5 years?
7. Liquidity & Diversification Requirements
Are there explicit, verifiable, and quantifiable guidelines regarding asset diversification?
7.1 (for example, are banks required to have some minimum diversification of loans among
sectors, or are their sectoral concentration limits)?
7.2 Are banks prohibited from making loans abroad?
7.3 Are banks required to hold either liquidity reserves or any deposits at the Central Bank?
7.3.1 If so, what are these requirements?
7.4 Do these reserves earn any interest?
7.4.1 What interest is paid on these reserves?
Are banks allowed to hold reserves in foreign denominated currencies or other foreign
7.5
If yes, please state the ratio
Are banks required to hold reserves in foreign denominated currencies or other foreign
7.6
Question
7.6
If yes, please state the ratio
7.7 What percent of the commercial banking system’s assets is foreign-currency
7.8 What percent of the commercial banking system’s liabilities is foreign-currency
7.9 What percent of the commercial banking system’s assets is in central government bonds?
7.10 What percent of the commercial banking system’s assets is funded with deposits?
What percent of the commercial banking system’s assets is funded with insured
7.10.1
deposits?
8. Depositor (Savings) Protection Schemes
Is there an explicit deposit insurance protection system? If no, you may skip to question
8.1
8.2. If yes:
8.1.1 Is it funded by (check one) : the government, the banks, or both ?
8.1.2 Are premia collected
8.1.3 Do deposit insurance fees charged to banks vary based on some assessment of risk?
8.1.4 If pre-funded, what is the ratio of accumulated funds to total bank assets?
8.1.5.1 US$:
8.1.5 What is the deposit insurance limit per account
(in US$ and local currency)?
8.1.5.2 Domestic currency:
8.1.6 Is there a limit per person?
8.1.6.1 If yes, what is that limit (in domestic currency)?
8.1.7 Is there formal co-insurance, that is, are depositors only insured for some percentage of
8.1.8 Does the deposit insurance scheme also cover foreign currency deposits?
8.1.9 Are interbank deposits covered?
8.1.10 Does the deposit insurance authority make the decision to intervene a bank?
8.1.10.1 If no, who does?
Question
Does the deposit insurance authority have the legal power to cancel or revoke deposit
8.1.11
insurance for any participating bank?
As a share of total assets, what is the value of large denominated debt liabilities of banks-
8.2 subordinated debt, bonds, etc.-that are definitely not covered by any explicit or implicit
savings protection scheme?
8.3 As part of failure resolution, how many banks closed or merged in the last 5 years?
Were depositors wholly compensated (to the extent of legal protection) the last time a
8.4
bank failed?
8.4.1 On average, how long does it take to pay depositors in full?
8.4.2 What was the longest that depositors had to wait in the last 5 years?
Were any deposits not explicitly covered by deposit insurance at the time of the failure
8.5 compensated when the bank failed (excluding funds later paid out in liquidation
procedures)?
8.6 Can the deposit insurance agency/fund take legal action against bank directors or other
8.7 Has the deposit insurance agency/fund ever taken legal action against bank directors or
8.8 Are non-residents treated differently than residents with respect to deposit insurance
(a) solely by the private sector
8.9 Who manages the insurance fund? Is it managed: (b) jointly by private-public
officials
(c) solely by public sector
8.10 Is participation in the deposit insurance system compulsory for all banks?
9. Provisioning Requirements
9.1 Is there a formal definition of a "non-performing loan" ?
the number of days a loan is in
arrears
a forward looking estimate of the
probability of default
Question
The primary system for loan classification is based
9.1.1
on (please pick one):
Other
9.2.1 Sub-standard ?
9.2 After how many days is a loan in arrears
9.2.2 Doubtful?
classified as:
9.2.3 Loss?
9.3.1 Sub-standard ?
9.3 What is the minimum provisioning required as
9.3.2 Doubtful?
loans become:
9.3.3 Loss?
9.4 What is the ratio of non-performing loans to total assets as of year-end 2001?
9.5 If a customer has multiple loans and one loan is classified as non-performing, are the
9.6 What is the aggregate net interest margin-to-asset ratio as of year-end 2001?
9.7 What is the aggregate overhead costs-to-asset ratio as of year-end 2001?
What is the tax deductibility of provisions:
9.8 9.8.1. Specific provisions can be deducted
9.8.2 General provisions can be deducted
9.8.3 Provisions Disclosure Requirements
10. Accounting/Informationcan not be deducted
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1
loan is still performing?
Does accrued, though unpaid, interest/principal enter the income statement while the
10.1.1
loan is still non-performing?
10.2 After how many days in arrears must interest income accrual cease?
Question
10.3 Are financial institutions required to produce consolidated accounts covering all bank
10.4 Are off-balance sheet items disclosed to supervisors?
10.4.1 Are off-balance sheet items disclosed to the public?
10.5 Must banks disclose their risk management procedures to the public?
10.6 Are bank directors legally liable if information disclosed is erroneous or misleading?
10.6.1 What are the penalties, if applicable?
10.6.2 Have they been enforced?
10.7 Do regulations require credit ratings for commercial banks?
10.7.1 How many of the top ten banks are rated by international credit rating agencies (e.g.
10.7.2 How many of the top ten banks are rated by domestic credit rating agencies?
10.7.3.1 Bonds issuance?
10.7.3.2 Commercial paper issuance?
Other activity (e.g., issuance of
10.7.3 Which bank activities are rated? bank certificates of deposit,
10.7.3.3 pension and mutual funds,
insurance companies, financial
guarantees, etc.)?
11. Discipline/Problem Institutions/Exit
11.1 Are there any mechanisms of cease and desist-type orders, whose infraction leads to the
11.1.1 Are bank regulators/supervisors required to make public formal enforcement actions,
11.2 Can the supervisory agency order the bank's directors or management to constitute
11.3.1 Dividends?
11.3 Can the supervisory agency suspend the
11.3.2 Bonuses?
directors' decision to distribute:
11.3.3 Management fees?
11.4 Have any such actions been taken in the last 5 years?
11.5 Which laws address bank insolvency?
11.6.1 Bank supervisor
11.6.2 Court
11.6.3 Deposit insurance agency
Bank restructuring or Asset
11.6.4
Management Agency
11.6 Who can legally declare - such that this
declaration supersedes some of the rights of
shareholders - that a bank is insolvent:
11.6.5 Other (please specify)
11.7.1 Bank supervisor
11.7.2 Court
11.7 According to the Banking Law, who has
11.7.3 Deposit insurance agency
authority to intervene - that is, suspend some or all
Bank restructuring or Asset
11.7.4 ownership rights - a problem bank?
Management Agency
11.7.5 Other (please specify)
Does the Law establish pre-determined levels of solvency deterioration which forces
11.8
automatic actions (like intervention)?
11.9.1.1 Bank supervisor
11.9.1.2 Court
11.9.1.3 Deposit insurance agency
11.9 Regarding bank restructuring and
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
Question
Bank restructuring or Asset
11.9.1.4
11.9 Regarding bank restructuring and Management Agency
reorganization, can the supervisory agency or any
other government agency do the following:
11.9.1 Supersede shareholder rights?
11.9.1.5 Other (please specify)
11.9.2.1 Bank supervisor
11.9.2.2 Court
11.9.2.3 Deposit insurance agency
11.9.2 Remove and replace management?
Bank restructuring or Asset
11.9.2.4
Management Agency
11.9.2.5 Other (please specify)
11.9.3.1 Bank supervisor
11.9.3.2 Court
11.9.3.3 Deposit insurance agency
11.9.3 Remove and replace directors?
Bank restructuring or Asset
11.9.3.4
Management Agency
11.9.3.5 Other (please specify)
11.9.4.1 Bank supervisor
11.9.4.2 Court
11.9.4.3 Deposit insurance agency
11.9.4 Forbear certain prudential regulations?
Bank restructuring or Asset
11.9.4.4
Management Agency
11.9.4.5 Other (please specify)
11.9.5.1 Bank supervisor
11.9.5.2 Court
11.9.5.3 11.9.5. Insure liabilities beyond any explicit deposit Deposit insurance agency
insurance scheme? Bank restructuring or Asset
11.9.5.4
Management Agency
11.9.5.5 Other (please specify)
Closure and liquidation:
Number
Closure and liquidation:
Percentage of banking system
assets
Intervention and open bank
assistance:
Number
Intervention and open bank
assistance:
Percentage of banking system
During the last five years, how many banks have assets
been resolved in the following way, and what was
11.10.1 Transfer of assets and liabilities
the percentage of assets of the banking system
(incl. purchase and assumption)
accounted for by each
or merger and acquisition:
Number
Transfer of assets and liabilities
(incl. purchase and assumption)
or merger and acquisition:
Percentage of banking system
assets
Other (please specify)
11.10.2.1 Closure and liquidation
11.10.2 What percentage of total bank assets did
each of these resolution methods account for?
Question
Intervention and open bank
11.10.2.2
11.10.2 What percentage of total bank assets did assistance
each of these resolution methods account for?
Transfer of assets and liabilities
11.10.2.3 (incl. purchase and assumption)
or merger and acquisition
11.10.2.4 Other
How many months did each of these resolution techniques take on average, from the
11.10.3
moment of intervention by the responsible authority to the moment of resolution?
11.11.1 Bank supervisor
11.11.2 Court
11.11.3 11.11 Who is responsible for appointing and Deposit insurance agency
supervising a bank liquidator/receiver: Bank restructuring or Asset
11.11.4
Management Agency
11.11.5 Other (Please Specify)
11.12 Is court approval required for supervisory actions, such as superceding shareholder
11.13 Is court order required to appoint a receiver/liquidator in the event of liquidation?
11.14 Can the bank shareholders appeal to the court against a decision of the bank supervisor?
12. Supervision
12.1 What body/agency supervises banks?
12.1.1 Is there more than one supervisory body?
12.1.2 Is there a single financial supervisory agency for the financial sector?
(a) the Prime Minister
(b) the Finance Minister or other
cabinet level official
(c) a legislative body, such as
To whom are the supervisory bodies responsible or
12.2 Parliament or Congress
accountable?
(d) other
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
How is the head of the supervisory agency (and other
12.2.1
Question
(c) a simple majority of a
legislative body (Parliament or
Congress)
How is the head of the supervisory agency (and other
12.2.1 d) a supermajority (e.g, 60%,
directors) appointed?
75%) of a legislative body
(e) other (Please specify)
Does the head of the supervisory agency (and other directors) have a fixed term?
12.2.2
If yes, how long is the term?
(a) the decision of the head of
government (e.g. President, Prime
Minister)
(b) the decision of the Finance
Minister or other cabinet level
authority
(c) a simple majority of a
legislative body (Parliament or
Congress)
The head of the supervisory agency can be removed
12.2.3 (d) a supermajority (e.g, 60%,
by:
75%) of a legislative body
(e) other
12.3 Are there important differences between what the supervisory agency is expected to do
12.4 How many professional bank supervisors are there in total?
12.5 How many onsite examinations per bank were performed in the last five years?
12.6 What is the total budget for supervision in local currency or dollars(please specify) in
12.7 How frequently are onsite inspections conducted in large and medium size banks?
12.8 How many of the total bank supervisors have more than 10 years of experience in bank
12.8.1 What is the average tenure of current supervisors i.e. (what is the average number of
12.9 If an infraction of any prudential regulation is found by a supervisor, must it be reported?
12.9.1 Are there mandatory actions in these cases?
12.9.2 Who authorizes exceptions to such actions?
12.9.3 How many exceptions were granted last year?
12.10 Are supervisors legally liable for their actions (e.g., if a supervisor takes action against a
Question
1. Entry into Banking
1.1 What body/agency grants commercial banking licenses?
1.1.1 Is there more than one body/agency that grants licenses to banks?
Is more than one license required (e.g., one for each banking activity, such as
1.1.2
commercial banking, securities operations, insurance, etc.)?
1.2 How many commercial banks were there at year-end 2001?
1.2.1 What are the total assets of all commercial banks at year-end 2001?
1.2.2 What are the total deposits of all commercial banks at year-end 2001?
What is the minimum capital entry requirement? (in US$ and/or domestic currency,
1.3
state which)
1.3.1 Is this minimum capital entry requirement the same for a foreign branch and subsidiary?
Is it legally required that applicants submit information on the source of funds to be used
1.4
as capital?
Are the sources of funds to be used as capital verified by the regulatory/supervisory
1.5
authorities?
1.6 Can the initial disbursement or subsequent injections of capital be done with assets other
1.7 Can initial disbursement of capital be done with borrowed funds?
1.8.1 Draft by-laws?
1.8.2 Intended organization chart?
Financial projections for first
1.8.3
three years?
Financial information on main
1.8.4
potential shareholders?
Background/experience of future
1.8.5 1.8 Which of the following are legally required to be
directors?
submitted before issuance of the banking license?
Background/experience of future
1.8.6
managers?
Sources of funds to be disbursed
1.8.7
in the capitalization of new bank?
Market differentiation intended
1.8.8
for the new bank?
In the past five years, how many applications for commercial banking licenses have
1.9
been received from domestic entities?
1.9.1 How many of those applications have been denied?
In the past five years, how many
applications for commercial
In the past five years, how many applications for banking licenses have been
1.10 commercial banking licenses have been received received from foreign entities?
from foreign entities?
How many of those applications
have been denied?
Number of applications from foreign entities to enter Received
1.10.1
through the acquisition of domestic bank? Denied
Number of applications from foreign entities to enter Received
1.10.2
through new, capitalized subsidiary? Denied
Question
Number of applications from foreign entities to enter Received
1.10.3
through opening a branch? Denied
Number of applications from foreign entities to enter Received
1.10.4
through some other means? Denied
1.11.1 Capital amount or quality?
1.11.2 Banking skills?
1.11.3 Reputation?
1.11.4 Incomplete application?
What were the primary reasons for denial of the
applications in 1.9.1 and 1.10.1?
1.11.5 Other reason(s). Please list.
1.12.1 Acquisition
1.12 Are foreign entities prohibited from entering
1.12.2 Subsidiary
through
1.12.3 Branch
2. Ownership
2.1 Is there a maximum percentage of bank capital that can be owned by a single owner?
2.1.1 If yes, what is the percentage?
2.2 Can related parties own capital in a bank?
If yes, what are the maximum percentages associated with the total ownership by a
2.2.1
related party group (e.g., family, business associates, etc.)?
2.2.2 Are there penalties for violating this rule?
2.3 Can nonfinancial firms own shares in commercial banks?
2.4 What fraction of capital in the largest 10 banks is owned by commercial/industrial
Can non-bank financial firms (e.g. insurance companies, finance companies, etc.) own
2.5
commercial banks?
deposits is held by the five (5)
2.6.1
largest banks at year-end 2001?
2.6 Of commercial banks in your country, what
fraction of:
assets is held by the five (5)
2.6.2
largest banks at year-end 2001?
2.7 Of all deposit-taking institutions in your country, what fraction of their assets is held by
3. Capital
3.1 What is the minimum capital-asset ratio requirement?
3.1.1 Is this ratio risk weighted in line with the Basle guidelines?
3.2 Does the minimum ratio vary as a function of an individual bank's credit risk?
3.3 Does the minimum ratio vary as a function of market risk?
What is the actual risk-adjusted capital ratio