Basel “Concordat”
The Basel “Concordat”, produced by the Basel Committee on Banking Supervision, is a seminal work on international banking regulation (1983). Since 1975, the Basel Committee had been developing its “Principles for the supervision of banks’ foreign establishments” – originally known under the designation “Basel Concordat” – in an effort to close any regulatory gaps that existed. These principles define the concept of appropriate adequate consolidated regulation supervision of a bank or a financial services group as an economic unit, (including any individual non-supervised banking establishments), by the parent supervisory authority of the country of origin, together with the responsibility of the host regulatory authority for individual supervision of those group entities established in their supervisory constituency. This is coupled with the requirement that no banking institution may avoid escape supervision. Consolidated regulation presumes in turn that the information needed for this can flow freely throughout the group, that it is accessible to the parent supervisory authority, and that it can be examined by them directly via internal and external auditors, through the exchange of information with the host authority or through its own on-site controls at the foreign banking establishment. |
