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					                                                                          C r e d i t Ag r i c o le
                                                                           Consultants




BANK SUPERVISION AND ACCOUNTING




            Bank Supervision and Accounting
           An overview of Project results and
                       possible recommendations

 XVth International                                9 June 2006   Richard Gregson
 Banking Congress


       This project was funded by the European Union
              BANK SUPERVISION AND ACCOUNTING

XVth International         9 June 2006               Richard Gregson
Banking Congress


MAIN CHARACTERISTICS OF THE PROJECT

Country – beneficiary: Russian Federation;

Partner of the Project – Central Bank of the Russian Federation;

Funded by: European Union;

Project Duration – 2 years to September 2005 (extended until 31
December 2005).
              BANK SUPERVISION AND ACCOUNTING

XVth International            9 June 2006                  Richard Gregson
Banking Congress


THE PROJECT CONSORTIUM

•PricewaterhouseCoopers
•The Institute of Chartered Accountants in Ireland
•Credit Agricole Consultants

THE PROJECT BENEFICIARY

The Central Bank of the Russian Federation, specifically, the Banking
Regulation and Supervision Department
              BANK SUPERVISION AND ACCOUNTING

XVth International          9 June 2006               Richard Gregson
Banking Congress




PROJECT OBJECTIVES


To facilitate further improvement of efficiency and effectiveness of
supervision over the activities of financial institutions and creation
of a better basis for the development of the banking sector in
Russia.
              BANK SUPERVISION AND ACCOUNTING

XVth International          9 June 2006              Richard Gregson
Banking Congress



PROJECT COMPONENTS


•    Application of IFRS Approaches in Prudential Reporting
•    Supervision and prudential reporting
•    Pilot banks
•    Awareness and Training
              BANK SUPERVISION AND ACCOUNTING

XVth International         9 June 2006               Richard Gregson
Banking Congress



KEY RESULTS
1. Development of an new architecture for prudential reporting and
   supervision methodology
2. Development of new and revised reporting forms and
   subsequent testing in pilot banks
3. Provision of recommendations for key legislative changes
   required to bring the legislative base of banking supervision in
   Russia into conformity with international practice
4. Provision of workshops, study tours and consultations to Central
   Bank supervision employees
              BANK SUPERVISION AND ACCOUNTING

XVth International             9 June 2006                  Richard Gregson
Banking Congress



SOME KEY RECOMMENDATIONS


•    Restructure the architecture of the reports submitted by banks
•    Move to risk-focused supervision
•    Improve infrastructure within the function of supervision
•    Enhance the approach to analyzing the reports submitted to the CBRF
•    Improve the level of coordination between on and off-site supervision
              BANK SUPERVISION AND ACCOUNTING

XVth International             9 June 2006                  Richard Gregson
Banking Congress



SOME KEY RECOMMENDATIONS


•    Restructure the architecture of the reports submitted by banks
•    Move to risk-focused supervision
•    Improve infrastructure within the function of supervision
•    Enhance the approach to analyzing the reports submitted to the CBRF
•    Improve the level of coordination between on and off-site supervision
              BANK SUPERVISION AND ACCOUNTING

XVth International              9 June 2006   Richard Gregson
Banking Congress



PRINCIPLES OF PROPOSED NEW ARCHITECTURE


1.   IFRS basis
2.   Prudential specificities
3.   International practice
4.   Russian environment
5.   Differentiated reporting
6.   Dynamic information
7.   Periodicity of reports
                BANK SUPERVISION AND ACCOUNTING

XVth International         9 June 2006      Richard Gregson
Banking Congress



THE BASIS OF THE PROPOSED ARCHITECTURE


1.   Activity
2.   Risks
3.   Financial Structure
4.   Profitability
              BANK SUPERVISION AND ACCOUNTING

XVth International            9 June 2006                 Richard Gregson
Banking Congress



WHERE TO NEXT?


•    Analysis and implementation
•    Phased convergence with the principles of Basle II by 2009/ 2010

				
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