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5 J. Int'l Banking Reg. 6 (2003-2004)

handle is hein.journals/jlbkrg5 and id is 1 raw text is: Editorial The Joint Forum: Initiatives by the BCBS, IAIS and IOSCO to combat money laundering and the financing of terrorism A process of deregulation and the liberali- sation of the financial markets over the last several decades has resulted in the growing emergence of financial conglomerates. This period saw the initial dismantlement of specialisation that distinguished the various markets and their participants. Financial conglomerates provide a combination of banking, insurance and securities business within a single group. The growth in the number of financial conglomerates has increased the interdependency of the finan- cial system in both domestic and interna- tional contexts. A financial conglomerate can jointly market different financial pro- ducts within a core portfolio of activities at domestic and international level and easily distribute products through their business network. The risks a financial conglomer- ate pose are not new, but a more coordi- nated approach to the supervision of their activities between the respective regulators is considered necessary to reduce any dispa- rities in their supervision. A large propor- tion of the work so far has centred on prudential regulation and supervision of financial conglomerates and especially on capital requirements and the concentration of risk across their business activities. A significant proportion of the work on financial conglomerates has been underta- ken by the Joint Forum, a group of techni- cal experts, set up in 1996 to continue the work of the Tripartite Group whose responsibility was to examine supervisory issues governing those institutions. The Joint Forum has, inter alia, a membership down from the following international supervisory bodies: the Basel Committee on Banking Supervision (BCBS), the Inter- national Organisation of Securities Com- missions (IOSCO) and the International Association of Insurance Supervisors (IAIS). Its mandate is to investigate specific issues governing each sector of the financial system and the unique risks posed by finan- cial conglomerates. The Joint Forum is also given a wide agenda to research issues of common interest to the three parent com- mittees. First, it is required to study common issues, including risk manage- ment, corporate governance and different approaches to regulation and supervision. Secondly, it has a responsibility to develop guidance and principles of best practice that govern risk and implications of extreme exogenous shocks within the regu- lated sectors. Thirdly, it is required to set up gateways for sharing information between the respective regulators and to prescribe principles of best practice for the supervision of financial conglomerates. In the 21st century, a more pressing con- cern has been initiatives by the various international supervisory standard setters to combat money laundering and the finan- cing of terrorism. In the Joint Forum's most recent publication the vulnerability of financial conglomerates is highlighted as well as the inconsistencies that exist between the regulated sectors and the work done so far to reduce the disparities Journal of International Banking Regulation, Vol. 5, No. 1, 2003, pp. 6-8 © Henry Stewart Publications, 1358-1988

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