Categories: Business

Financial sector regulators sign MoU for consolidated risk-based supervision

Central Bank Governor Dr. Indrajit Coomaraswamy and representatives of the three regulators, viz, Central Bank Deputy Governor H.A. Karunaratne, SEC Director General Vajira Wijegunawardane, IRCSL Director General Damayanthi Fernando signed the MoU on consolidated risk-based supervision on behalf of the respective institutions Â

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The Central Bank entered into a Memorandum of Understanding (MoU) with the Securities and Exchange Commission of Sri Lanka (SEC) and the Insurance Regulatory Commission of Sri Lanka (IRCSL) on 31 December 2018, to conduct effective consolidated risk-based supervision and for the Central Bank to be the lead supervisor in this regard.
Consolidated supervision is an essential tool for supervising financial groups. It involves assessment of group-wide risks that may emanate from relationships among members of a corporate group operating across different financial sub-sectors.
Group-wide consolidated supervision of such institutions is necessary in order to evaluate and assess contagion and reputation risks posed by such entities to the financial system and to contain systemic risk.

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