Supervisory tasks

The Supervisory Authority deals with a new supervised entity’s access to the market right from the initial phase by issuing the authorizations required by law.

After this, it checks to make sure that the activity of the authorized entity is conducted in compliance with the regulations and also possesses the power to take measures and apply sanctions. Moreover, it also monitors the management of crisis situations in companies and the liquidation phase.

The supervisory action basically concerns the three following areas:

  • off site supervision;
  • on site supervision;
  • regulatory supervision.

The CBSM issues regulations of secondary nature, sometimes of an explanatory or interpretative character, so as to implement the general principles established by the laws of the Republic. The CBSM is required to analyse the impact of its regulations, to ensure that forthcoming rules are known through consultation procedures involving the recipients of the provisions and the other stakeholders concerned.

The CBSM acquires and processes all the data considered necessary in order to ascertain that the supervised entities maintain a current and forecast capital and economic balance, as well as compliance with laws, regulations and sound practices.

Direct inspections are conducted in the premises where the supervised entities carry on their business in order to acquire first-hand knowledge about their operating methods, the efficacy and efficiency of the company processes, the relevant documentation and the reliability of the information provided.

The organizational structure of the CBSM, whose task is supervising the banking, financial and insurance system, answers to the Supervision Committee, a board formed by the Director General, who chairs it, and the inspectors nominated by the Governing Council.

The CBSM issues regulations of secondary nature finalized to provide detailed and technical rules within the general framework and guidelines stated by the laws. The CBSM is required to analyse the impact of its regulation, to ensure the disclosure of forthcoming rules through procedures of consultation with associations representing the interests of supervised entities and consumers, or even other stakeholders when necessary.

The off-site supervision consists in acquiring and processing all the data that the CBSM considers necessary in order to monitor that supervised entities maintain capital adequacy, current and perspective economic equilibrium, effective and efficient internal organization, as well as compliance with laws, regulations and sound practices. By means of direct inspections in the premises where the supervised entities carry on their on-going activity, the on-site supervision is aimed at acquiring immediate knowledge of operating methods and relevant documentation. Within the organizational chart of the CBSM a specific body is in charge of coordinating the action of every unit operating in the different areas of banking, financial and insurance supervision. This is the Supervision Committee, made of the Director General, who acts as chairman, and of a minimum of two inspectors appointed from the Governing Council.