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The Basel Committee on Banking Supervision (BCBS) has release its findings on the “Implementation of Compliance Principles”. This is an assessment of the status of implementation of the principles on the management of compliance risk described in “Compliance and the Compliance Function in Banks” issued in April 2005.
The BCBS’s Accounting Task Force assessed the degree to which the compliance principles have been implemented, reviewed recent compliance-related incidents, and looked at the challenges facing the industry in 21 jurisdictions (participants were the 13 member-jurisdictions of the Basel Committee, plus 8 other jurisdictions from the BCBS’s International Liaison Group).
Only one of the respondents reported that it did not have any formal compliance requirements, the rest having documented compliance requirements, even if only as part of the overall risk management framework. All jurisdictions expect banks to develop a compliance framework that follows closely the principles described in the 2005 paper and this is taken into account in the supervisory process. Eight jurisdictions have adopted the recommendations virtually unchanged, with 4 others adopting a principle-based approach. Nearly all respondents impose compliance responsibilities on the board of directors and senior management.
The BCBS said “The publication of the survey results is intended to assist those members of the supervisory community that are still working to improve their compliance frameworks. It does so by providing a range of practice and by sharing information about the solutions developed to address the main issues faced by jurisdictions that have implemented the high-level principles.”
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