Autumn
2006 Training Course/Seminar Series
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Legal Risks And Good Governance For Central Banks And Supervisors
4-day intensive residential programme, 5 - 8 September
2006
Venue: King’s College, Cambridge University
Course Director: René Smits , Professor of Law & Economic
and Monetary Union,
University of Amsterdam
Course Adviser: Charles Goodhart, CBE, Professor Emeritus, London School
of Economics, Financial Markets Group
Details of how to register
are here
Dear
Delegate,
LEGAL RISKS AND GOOD GOVERNANCE FOR CENTRAL BANKS AND SUPERVISORS
Over the last decade, the environment in which legal advisers
to central banks and financial market authorities operate has undergone
far-reaching changes. These legal and institutional changes are continuing.
They bring with them new challenges and risks.
As the mandates of central banks and regulatory authorities change, their
legal framework must be updated and strengthened. As calls for accountability
increase, they need a solid legal foundation on which to base their decisions
and defend their governance structures.
This four-day residential course offers legal officers a chance to meet
and consider, in practical terms, how best to react to this changing landscape.
The course addresses four key areas:
Legal risk profile for central banks and supervisors:
Nobody can ignore the growing readiness of those with a complaint against
the central bank or supervisory authority to take legal action. How can
this challenge best be met?
Good governance: Senior decision makers recognise the
critical importance of good governance for central banks and supervisory
agencies: it is the foundation of institutional credibility. However,
the appropriate model of internal governance structures can be elusive.
The group will discuss how their institutions are implementing good governance,
and consider lessons to be drawn from international comparisons.
Accountability: National and international actors demand
more transparency and accountability. How can central banks and regulatory
authorities best react?
International developments: Financial market authorities
in industrial and developing countries are under enormous pressure to
stamp out money laundering, combat terrorism and meet a host of international
standards. The delegates will learn latest trends in best practice.
Underpinning all these points is the recognition that legal officers need
to be proactive in identifying, assessing and addressing the legal and
governance risks which their institutions are likely to face in a fast-changing
world. This training course/seminar offers senior law officers an up-to-date
guide to the implications of central bank policymaking and restructuring
in the light of selected recent experience.
This course offers an opportunity for delegates to learn from expert practitioners
and discuss their challenges and experiences with peers in an informal
setting.
For more information about this exciting programme, please take a few
moments to look at the detailed course contents presented on the pages
which follow.
I look forward to welcoming you to Cambridge.
Yours sincerely,
William Clarke,
CBE, PhD Chairman
Identifying
current legal and governance issues
Professor
René Smits
Chairman
As the role of central banks and
regulatory agencies has evolved, the job of managing these institutions
has become more complex. Even agencies with well defined mandates and
clear accountability structures must strive to define their role and
carve out an institutional remit. This session concentrates on the key
changes which affect central banks and regulatory agencies and investigates
how different statutes/legal frameworks can affect governance and performance
in the context of global developments and challenges.
Supervisory liability in common law jurisdictions and in the EU
Charles
Proctor
Partner, Bird and Bird
As central banks and supervisors
perform their many public policy roles (in monetary policy, and as supervisor,
market participant, and agent of the government) they are exposed to
a variety of legal risks. Increasingly, central banks and supervisors
may find themselves forced to account for their actions in a judicial
setting. With particular reference to common law jurisdictions the speaker
examines key recent cases including that of the Bank of England and
BCCI and the Peter Paul case before the European Court of Justice.
Michel Tison
Financial Law Institute, Ghent University
Increasingly, banking supervisory action by public authorities, whether central banks or independent supervisory agencies, is being questioned in court through liability claims. This session examines the implications of this trend in civil law jurisdictions and in European Union law, and reflects on the essential role of banking supervisors in this perspective.
Compliance with supervisory rules
Robert Purves
Chief Counsel, Insurance and Prudential Policy, Financial Services Authority (UK)
Like many other supervisory agencies around the world, the FSA is moving away from prescriptive rule-based supervision towards a framework based on principles. The speaker will sketch the history of rule-based supervision since the Big Bang of 1986, and place the developments in UK financial supervision in the context of EU rules, developments elsewhere in Europe, the Basel framework and other international rules. This session considers how central banks and regulators can go about instilling a culture of compliance amongst the institutions it regulates.
Central bank profits and central bank law
Chris Sermon
PricewaterhouseCoopers
Developments in central bank financial reporting, coupled with a low-interest rate environment, are depressing central bank earnings. Central banks wishing to adopt International Financial Reporting Standards, for instance, are grappling with the income volatility which can be the result. Central bank laws, which often stipulate that all profits must be paid to the government, can exacerbate the problem. This session, drawing on PWC's research into different central bank structures, examines the current changes in central bank financial reporting with particular emphasis on how they might affect statutory profit distribution arrangements.
Regulatory issues in Islamic finance
Hamid Younis
Partner, Taylor Wessing
The base of Islamic investors in investing in Shari'ah-compliant financial products is growing. An estimated $20 billion is currently invested in Islamic funds, and experts expect this number to rise strongly in the coming years. In addition, a number of key regional economies are looking into ways to come up with Shari'ah-compliant investment vehicles to fulfil the energy and infrastructure project financing requirements. These developments also raise complex and important questions for regulators. In this session the speaker will discuss some of the latest and most important developments in the regulation of Islamic finance.
Legal implications of IMF
reform
Bernard
Steinki
Senior Counsel, Legal Department,
IMF
Central banks and financial market
authorities will have the outcome of any IMF reform. What are the legal
implications of on-going reform within the IMF? What will reform mean
for the Articles of Agreement and instruments adopted pursuant to it and
what may be the consequences for central banks? This session considers
the relations of central banks with the Fund, notably in the areas of
debt relief, the issue of the prohibition of central bank credit to the
government and central bank financing of members' financial position in
the Fund.
Competition: recent developments
in global and regional M&A activity
Oliver Bretz & Mark Grittiths
Clifford Chance
Cross-border mergers and acquisitions
are on the rise and pose challenging problems for supervisory agencies.
Competition issues may determine approval of proposed link-ups. What are
the prospects for regional and global consolidation of the financial sector?
Legal issues surrounding central bank
market intervention
Stefan
Gannon
General Counsel, Hong Kong Monetary
Authority
When central banks intervene in markets, they do so with
immense resources, privileged information, and objectives different from
private sector market participants. They must fully understand the legal
issues surrounding their actions, and ensure that they do not abuse their
position. The speaker will discuss this subject with relation to the HKMA’s
experiences of intervention, including its large and controversial domestic
equity purchases in 1998.
Microfinance and regulatory
change in India
Surendra
Kumar
Attorney, Supreme Court of
India
This session outlines recent regulatory developments in the Indian financial sector, including a discussion on the possible establishment of a new supervisory agency and its relations to the Reserve Bank of India. Other themes that will be picked up on are limits on inward investment in the financial sector and the regulation of microfinance in India.
Workshop
session on governance
Led by
René Smits
Chairman
Accountability, autonomy and transparency
are now regarded as best practice for central banks. There is less agreement
on how to achieve this though, and the governance structures of central
banks vary considerably. This session will invite delegates to present
and discuss challenges and developments related to governance and organisational
aspects within their institutions.
Corporate governance at the FRBNY
Thomas
C. Baxter, Jr
General Counsel, Federal Reserve Bank
of New York
Unlike for private-sector financial
institutions, where there is growing agreement on appropriate codes of
governance, the differing mandates and circumstances of central banks
and regulators has made such agreement difficult. The speaker will discuss
the scope for adapting private-sector codes of governance for the public
sector, in particular drawing on the experiences of the Federal Reserve
Bank of New York in its work to adopt policies based on Sarbanes-Oxley.
Monetary stability arrangements
Rosa
Lastra
Senior Lecturer in Law, Centre for Commercial Law Studies,
Queen Mary College London
Regulatory and supervisory arrangements in Europe are
in a state of flux. Among the key questions needing to be resolved are
the governance structures for financial supervision. How for instance
can matters of accountability be tackled under the current and proposed
arrangements? What are the main issues in monetary stability arrangements?
Lessons learnt and prospects
Led by René
Smits
Chairman
The course concludes with a discussion led by the chairman.
This provides a chance for delegates to share views and experiences gained
during the four days of the course and draw conclusions. Delegates will
be asked to draw up action plans which they can take back to their home
institution.
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