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Supervisory colleges have been established over some time for key multinational companies. They function as workings groups of the national financial supervisors with the objective of closer cooperation and cross-border supervision. The G20 asked for the establishment of colleges in the 30 systemic most important financial companies.



The consultation of the Basel Committee on Banking Supervision (BCBS) looks at the working methods of colleges.



UNI, ITUC and TUAC see a clear need for multinational supervisory colleges to tackle the ever more integrated business model of multinational banks. They criticise that financial regulation and supervision has been characterised by de-regulation, exploitation of loop-holes, regime shopping and ineffective supervisory structures, especially regarding multinational banks. In short, any proper system of checks and balances was and still is missing.



UNI's Oliver Roethig said: "there is an urgent need for profound reform and colleges are a key instrument to strengthen supervisory oversight. We must stop banks going for the least regulated environment putting the financial system and lifelyhood a entire societies at risk."



The trade unions are in favour of colleges that provide a coordinated approach to the supervision of multinational groups rather than continuing the current approach of loose cooperation (see also our attached statement on the 4^th plenary of the Financial Stability Board).



"The current operations of the colleges, the process of reforming their work and the substance of the BCBS’s proposal fall short," said Roethig. "The set of principles seems to be about fine-tuning existing procedures rather than looking at a fundamental overhaul of the instrument in light of the financial crisis. The approach needs to be re-thought and broadened."



UNI Finance, ITUC and TUAC assess the current proposal as an approach that is:

• insulated and inward looking, essentially limited to dealing with cooperation among supervisors – instead, the work of the colleges needs to be transparent and open to the outside world.
• viewing the respective bank, i.e. management, as the only relevant stakeholder – instead, colleges need to integrate the valuable input of trade unions, consumers, etc;
• narrow in focus – instead colleges also need to look at and assess the impact on risk assessment of internal operating procedures and practices of companies.

"As the representative organisation of finance unions around the world, UNI Finance is ready to contribute to effective supervision," continued Roethig. "It can aggregate the input of employees through its trade union networks in the major finance companies worldwide.



"Employees are the face of the company to its customers. They are responsible for creating trust and delivering satisfaction to customers and thereby instrumental for re-establishing confidence in the financial sector as a whole.



"Their experiences and knowledge of internal business practices and the impact of these on the broader risk situation in the sector are essential to provide effective supervision."



For the text of the contribution, see related files.