FSA Issues Second Progress Report On Its 'Better Regulation' Efforts

The Financial Services Agency (FSA) published on 26 January its second progress report on its efforts towards "Better Regulation" of financial institutions. The report describes the progress the FSA made in this area between May and December 2008, with particular

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The Financial Services Agency (FSA) published on 26 January its second progress report on its efforts towards “Better Regulation” of financial institutions. The report describes the progress the FSA made in this area between May and December 2008, with particular reference to the “four pillars” of its approach to regulation, as listed below.

Optimal combination of rules-based and principles-based supervisory approaches.

– Specified for certain widely agreed principles to be applied in daily supervision.

– Established a principles-based regulatory framework.

Timely recognition of priority issues and effective response.

– Focused on certain points to do with financial institutions’ risk management.

– Quickly implemented measures to stabilize financial system and facilitate financing for Small and Medium sized Enterprises.

Encouraging voluntary efforts by financial institutions and placing greater emphasis on providing them with incentives.

– Reduced penalties for entities that report certain violations themselves at an early stage.

– Began reflecting good initiatives by entities Financial Inspection Ratings System grades.Improving the transparency and predictability of regulatory actions.

– Revised inspection manuals and clarified priority issues for regulation in program year 2008.

In the same report, the FSA also details the progress it is making in five areas of immediate focus, including enhancing dialogue with financial institutions, enhancing dissemination of information, and strengthening cooperation with foreign authorities. For example, the Agency says that it almost doubled the amount of English press releases on its website compared to the same period in the previous year.

For further information: http://www.fsa.go.jp/en/news/2009/20090126.html

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