I. Key terms

To grant a license	- надавати ліцензію
“Moral suasion“	- увіщювання
Capital adequacy	- адекватність (належний) капіталу
A paid-up capital	- сплачена частка акціонерного капіталу
Legal penalties	- штрафи
“Legal clout“	- юридичні вимоги до відповідності
To adhere to	- дотримуватися

II. Answer the following questions in your own words:

1. What body can have the authority to exercise its supervision function?

2. Why do you think the Central Bank can be effective for supervision?

3. What department is usually responsible for bank supervision?

4. What is the necessary manpower for bank supervision?

5. Why is it important for bank supervision to exist within a legal framework?

6. What are the necessary levels in a legal framework?

7. Do you agree there should be prudential components for a legal framework?

III. Fill in the blanks:

a supervisor; undue; “overbanked”; conducting; capital requirements; responsibility.

Entry control. The most important power of _____ confines banking operations to entities which have received a license authorizing them to do banking business, as defined by law.

· Effective entry control begins with a carefully considered definition of banking business in the law, ensuring that the acceptance of deposits from the public by unlicensed entities is prohibited.

· It should prohibit the use of certain words (such as "bank" and "finance") by unlicensed institutions and authorize the supervisory authority to investigate entities suspected of _____ banking business without a license.

The legal framework should clearly define who approves or rejects applications for a new banking license and the various steps in the application process.

- Timetables for the process should be specific so as to prevent inaction or _____ delays;

- The licensing process can be clarified or enhanced by a licensing regulation or a written policy, to include:

1) Initial capital _____, especially if present minimum requirements are now viewed as inadequate;

2) Expected qualifications of senior management;

3) Aspects or requirements regarding a branch network;

4) Expected benefits to the public from the new bank;

5) Competitive aspects regarding too many or too few banks;

6) Treatment of foreign applications as compared to local ownership.

· Finally, it is important that the supervisory authority have, at a minimum, a key role in approving new licenses.

- The supervisor has primary _____ for the safety and soundness of a bank once a license has been granted;

- Past experience has shown that _____ financial sectors are often the result of a politicized licensing process, which excludes the supervisory authority.

Дата добавления: 2014-12-29