The following extract is taken from a speech by Jaime Caruana, Governor of the Bank of Spain, as Chairman of the Basel Committee on Banking Supervision, given to the Institute of…
Abstract
The following extract is taken from a speech by Jaime Caruana, Governor of the Bank of Spain, as Chairman of the Basel Committee on Banking Supervision, given to the Institute of International Finance in Dubai on 21st September, 2003.
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The purpose of this paper is to systematically study the research and development history of suspicious transaction reporting (STR) system in China, and introduce the core…
Abstract
Purpose
The purpose of this paper is to systematically study the research and development history of suspicious transaction reporting (STR) system in China, and introduce the core elements in constructing an intelligent surveillance system which could provide a solution to the situation of low effectiveness and efficiency in Chinese Financial Institutions (FIs) STR procedure nowadays. The solution outputs those falling out of the normal customer behavior profiles instead of only extracting data by the rules issued by authorities.
Design/methodology/approach
This paper reviews the latest literature, regulations and guidelines of STR gathered domestically and overseas, and hands out questionnaire surveys to hundreds of software vendors, regulators and FIs, details the current situation of poor deployment of intelligent in China and tells the difficulties of subjective STR decision procedures.
Findings
Few Chinese FIs have deployed real intelligent STR systems, most are using rule-based filtering systems conformed to the objective STR supervisory regulations. To change the embarrassing situation, the regulators have tried to introduce self-regulatory mode which allows the FIs to define STR decision procedures themselves. Limited by the FIs’ ability of information sharing and investigation scope, FIs could hardly unveil the whole schema of a money laundering organization. The pursuant objective FIs can reach is to construct a system that could tell what the normal customer behaviors look like and extract all those falling out of the system’s expectations as suspicious activities.
Research limitations/implications
Only the core elements of the total intelligent STR system are discussed, that is, what, why and how about the customer behavior pattern recognition system. Besides this, a total solution should also use a watch list, reporting decision, cases management, risk control, etc.
Originality/value
This paper for the first time argues that the orientation of regulatory rules in China has actually hindered the spreading of really effective intelligent system for these years. The author creatively puts forward a solution to the difficult problem for FIs to spot criminal schema directly, instead the FIs should only be required to determine whether the transactions carrying out currently are falling within the expected behavior pattern scopes, which is under the FIs’ capabilities due to the internationally accepted obligations of “Know Your Customer”.
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The purpose of this paper is to apply theoretical concepts of corporate and bank boards to the Boards of Directors at Federal Reserve Banks and at US Basel II A‐IRB adopters. The…
Abstract
Purpose
The purpose of this paper is to apply theoretical concepts of corporate and bank boards to the Boards of Directors at Federal Reserve Banks and at US Basel II A‐IRB adopters. The Basel II Accord set to take effect in the USA in 2009 provides direction as to board oversight in Pillar 2. Since the Federal Reserve is one agency responsible for this document, the paper proposes to investigate the governance structure at US banks, presumably adopting (or opting in) the Basel II A‐IRB framework.
Design/methodology/approach
The board structure at Federal Reserve District Banks as of 2006 is examined. Also analyzed are the board structure, executive compensation, and ownership structure at the 22 banks identified as Basel II A‐IRB adopters. These results are then compared with current views and standards of “good governance” in the literature.
Findings
It was found that there is a fairly diverse representation on the board (in terms of female directors), a large proportion of directors are CEOs (generally of other banks), and that boards comprised a majority of outside directors. Several governance characteristics are contrary to “good governance” characteristics described in the literature. Further, banks adopting A‐IRB procedures in Basel II may need to improve governance structures to be in compliance with Pillar 2 of Basel II.
Practical implications
The Federal Reserve System, in an effort to increase board oversight as part of a risk management framework, should also consider its own board structure in light of current research on private‐sector boards. Both Federal Reserve District Boards and Basel II Boards should work towards exemplary corporate governance in light of their place in the US banking system.
Originality/value
The paper investigates the governance structures of banks.
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– This paper aims to highlight the new regulatory framework established by Basel III.
Abstract
Purpose
This paper aims to highlight the new regulatory framework established by Basel III.
Design/methodology/approach
This paper provides a critical review of the existing literature concerning bank supervision while providing an overview of the transition from Basel I to Basel III rules and critical appraisal of the current regulatory framework. Review of the existing literature.
Findings
Basel III introduces new measures in favor of bank stability and in order to mitigate the propagation of financial shocks. But on the other hand the new regulatory framework adds an extra burden to banks’ business plans affecting credit policies and thus the real economy. Another issue that is not properly addressed is the rising of financial innovations that are able to pass by the new regulations. Overall Basel III rules are moving to the right direction but need to stay always up-to-date in order to catch up with the modern ever-evolving financial system. Pros and cons. Need for improvement.
Originality/value
The paper presents an up-to-date review of Basel rules with future prospects.
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Gerson Tontini, Luís Irgang, Adriana Kroenke, Ivan Hadlich, Jaime Dagostim Picolo and Josip Mikulic
The purpose of this study is to demonstrate how to use customer spontaneous comments to identify which aspects influence the overall customer satisfaction with restaurant services…
Abstract
Purpose
The purpose of this study is to demonstrate how to use customer spontaneous comments to identify which aspects influence the overall customer satisfaction with restaurant services from a nonlinear perspective.
Design/methodology/approach
The authors collected data from 399 spontaneous comments about a chain of fast-food restaurants in Brazil. The comments are freely available on the TripAdvisor portal and were extracted and classified according to seven dimensions related to the quality of services: tangibles, reliability, responsiveness, assurance, empathy, quality of the food and price. Next, the authors combine the critical incident technique (CIT) and the penalty-reward contrast analysis (PRCA) to investigate the nonlinear relationship between service quality assessment and overall customer satisfaction.
Findings
The method of integrating CIT with PRCA explains 64.7% of the variation in the customer's assessment of the services provided (
Originality/value
Using comments available for free on the Internet and evaluating how positive and negative comments can jointly influence customer satisfaction, the proposed methodology demonstrates how restaurants can use their customers' spontaneous comments to identify critical aspects to be managed and improved. To the best of authors’ knowledge, this is the first study presenting how restaurants can use customer spontaneous comments, freely available on the internet, to identify the relevance of different aspects of the services provided from a nonlinear perspective. In addition, the present study shows that although customers spontaneously tend to share more positive than negative comments about restaurant services, events related to negative experiences have a stronger influence on overall satisfaction.