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About Integrated Supervision

The global financial crisis revealed major abnormalities in the regulatory and supervisory system. The connection between prudential supervision and global financial stability was not clearly received and understood. The idea that if the financial institutions, taken separately, are sound, then the whole system is sound, was flawed, it did not withstand the systemic shocks caused by crisis since 2007. This is why a new worldwide concept within the supervisory structures was launched and is implemented, that of macroprudential policies with the final aim to identify, solve and avoid systemic risks. Thus, the European Systemic Risk Board and the Financial Stability Oversight Council was created in the USA. They will monitor evolutions which may endanger the overall stability of the financial system.

The macroprudential approach causes an integration of the common risk elements related to the three markets supervised by ASF, the insurance, financial investments, and private pensions markets. The risks within each sector should be integrated with those of the other sectors in order to have an integrated perspective on them. Integration should be both vertical, within the sector, and cross-sector, horizontal. In this case, macroprudentiality covers the risks related to financial groups and conglomerates.

Integrated supervision transcends the micro activities by ensuring the unitary framework for monitoring operational and systemic risks, in terms of processes, people and systems. The risks of a system reside in the construction and control system, not in what the system actually processes, therefore it transcends a specific activity and may be addressed in an integrated manner.

Uncontrolled risks cause crises for which the authorised entities and sectoral markets themselves should be prepared. Integrated supervision will ensure a uniform approach to crisis prevention and response, including stress testing of entities and structures.

The new operational and systemic risks related to information technology and cybercrime should be treated in a unitary and integrated manner, in order to obtain an appropriate response. The checkpoints, risk ratios, impact analyses, identifying and gathering incidents, regulating risk areas, outsourced activities, new auditing concepts became a European priority.

The Integrated Supervision Directorate of ASF should synchronize the internal issues with the external ones, ensuring a uniform application of European legislation into the national one.

At the national level, integration should be ensured with the actions of macroprudential stability committees through cooperation with NBR and the other specialized bodies.

From a different perspective, that of services consumers, the Integrated Supervision Directorate should provide a unitary framework for consumer protection with common elements in terms of needs and attitude, regardless of the supervised sector.