Financial Sector Governance and Accountability

Banks, because of their central role in operating the payment system and in managing customers’ income and savings, have always been subject to stricter financial reporting rules than other companies. The 2008 financial crisis highlighted severe weaknesses in the risk management, control and governance processes of the banks as well as in their statutory audit and financial supervision. This led to increased scrutiny of the respective roles in interaction of banking supervisors and external auditors as well as a review of the reporting obligation of the banks, and the necessity for those to have a stronger capital base. As banks and more generally financial sector companies are an essential engine of growth for developing economies in Europe, and also may carry risks impacting their financial stability, they must be effectively supervised. The CFRR helps supervisors to better understand the importance of financial reporting and how to leverage the auditors’ work. It also train supervisors on new accounting standards, that is recently published International Financial Reporting Standards, including IFRS 9 on financial instruments and others.  

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