Jan 04, Colombo: The Central Bank of Sri Lanka (CBSL) has entered into a Memorandum of Understanding (MoU) with the Securities and Exchange Commission of Sri Lanka (SEC) and the Insurance Regulatory Commission of Sri Lanka (IRCSL) on 31 December 2018, to conduct effective consolidated risk-based supervision and for CBSL to be the lead supervisor in this regard.
Consolidated supervision is an essential tool for supervising financial groups. It involves assessment of group-wide risks that may emanate from relationships among members of a corporate group operating across different financial sub-sectors, the Central Bank said in a statement.
Group-wide consolidated supervision of such institutions is necessary in order to evaluate and assess contagion and reputation risks posed by such entities to the financial system and to contain systemic risk.
In the presence of Dr. Indrajit Coomaraswamy, Governor of CBSL, representatives of the three regulators, viz, Mr. H A Karunaratne, Deputy Governor of CBSL, Mr. Vajira Wijegunawardane, Director General of SEC and Mrs. Damayanthi Fernando, Director General of IRCSL signed the MoU on consolidated risk-based supervision on behalf of the respective institutions.