Key Supervisory and Regulatory Initiatives

SUPERVISION

BOX 1
HARMONIZED RISK ASSESSMENT FRAMEWORK

Under this framework, the assessment of an institution is built on a thorough understanding of the institution, its activities, risk management processes and operating environment. The key stages in the risk assessment process are:

  • Determining the significant activities undertaken by an institution.
  • Assessing the inherent risks and adequacy of corresponding risk management systems and internalcontrols for each of these activities.
  • Assessing the financial strength of the institution and the adequacy of the Board and senior management oversight of its businesses.
  • Determining the overall risk rating for the institution, and consequently the supervisory measures needed.

The new risk assessment framework improves the consistency and robustness of MAS' risk assessment process, and in turn leads to more effective use of our supervisory resources.