Compliance in Banking
Course - International Diploma in Compliance
Assignment due date - 29th August, 2011
Industry - Banking
Board Memorandum
To : Board of Directors Executive Management
Subject : Recommendations to promote the independence of the Compliance Function
Date : 29th August, 2011
In reviewing last year regulator’ report on our bank, the bank have been imposed more than fifteen major violations from the regulators and some of the violations have got the bank into paying a huge amount of penalties. When penalties imposed the reputation of the bank will be at risk and this risk will lead the bank to financial loss. The bank has to redefine its risk measures and practices to avoid such failure in meeting regulators needs and meet all compliance requirements.
Compliance Risk
Our bank is conceder to be one of the leader banks nationally and internationally and in order to keep this position the bank has to manage its compliance risk strictly starting from compliance function. The very common practice which conceder to be an issue from a regulatory aspect is going through all the rules and regulations and stating we are in compliance with them and we are not 100% complied. Now it is the time for the bank to put a full stop on such kind of issues and focus on working on compliance risk by having an effective and efficient compliance function.
Effective Compliance Function
In April 2005 Basel Committee on Banking Supervision released a paper on Compliance and the Compliance Function in Banks. Over all the paper define and states the responsibilities of the Board of directors and senior management towards compliance and explain Compliance Function responsibilities with some other important principles which are related to compliance function. One of the important principles which the paper have mentioned is “Compliance Function Principles” which identifies four key measures that are frequently required by regulators across the world
Assignment due date - 29th August, 2011
Industry - Banking
Board Memorandum
To : Board of Directors Executive Management
Subject : Recommendations to promote the independence of the Compliance Function
Date : 29th August, 2011
In reviewing last year regulator’ report on our bank, the bank have been imposed more than fifteen major violations from the regulators and some of the violations have got the bank into paying a huge amount of penalties. When penalties imposed the reputation of the bank will be at risk and this risk will lead the bank to financial loss. The bank has to redefine its risk measures and practices to avoid such failure in meeting regulators needs and meet all compliance requirements.
Compliance Risk
Our bank is conceder to be one of the leader banks nationally and internationally and in order to keep this position the bank has to manage its compliance risk strictly starting from compliance function. The very common practice which conceder to be an issue from a regulatory aspect is going through all the rules and regulations and stating we are in compliance with them and we are not 100% complied. Now it is the time for the bank to put a full stop on such kind of issues and focus on working on compliance risk by having an effective and efficient compliance function.
Effective Compliance Function
In April 2005 Basel Committee on Banking Supervision released a paper on Compliance and the Compliance Function in Banks. Over all the paper define and states the responsibilities of the Board of directors and senior management towards compliance and explain Compliance Function responsibilities with some other important principles which are related to compliance function. One of the important principles which the paper have mentioned is “Compliance Function Principles” which identifies four key measures that are frequently required by regulators across the world
References: 1. Compliance and the compliance function in the banks, Basel Committee on Banking Supervision, 2005. 2 7. Hector Sants, 2007, Managing Compliance Risk in Major Investment Banks - Good Practices.