I find supervisors are displaying an overemphasis on compliance and formal letters notifying institutions of sometimes minor breaches, which, in my respectful view, is diverting attention away from important issues of safety and soundness of institutions. For example, the minutes of one of FISD’s “Breaches Meetings” referred to efforts to force a financial institution to address a perceived under-provision for doubtful accounts.
These efforts included consultations with the legal department as well as six letters and two emails to the affected institution. I wonder whether this matter could have been dealt with in one meeting following completion of FISD’s analysis, in which the institution was advised to make the additional provision, and quietly reminded of the Central Bank’s legal powers.