The work done by the BNB in this area is the logical extension of the reforms in the banking sector that started in 2015 and is expected to continue throughout 2019 with the following focal points: • Development of an efficient organization for cooperation with the ECB within the supervisory colleges and joint supervisory teams; • Streamlining the supervisory strategy to match the new institutional reality resulting from the close cooperation arrangements; • Dividing the supervisory focus among important and less important institutions; • Organisation of collection of supervisory and statistical data for supervisory purposes and validation of supervisory reporting; • Development of information systems consistent with the new stage in the supervisory activities. The third working block relates to the organisation and carrying out of the asset quality review and the stress test. The process is under way for the selected six banks and is conducted by ECB in line with an ECB-adopted methodology and macroeconomic scenarios for the purposes of the stress test. The bulk of the assumptions and parameters are determined by the Central Project Steering Committee at the ECB with an established working communication between the BNB, ECB and SSM in this process. The Banking Supervision activities will continue through implementing the European regulatory framework applicable to the credit institutions with a focus on the consistent implementation of the technical standards and regulations, the Guidelines of the European Banking Authority and the recommendations of the European Systemic Risk Board.
Another important task for the financial system is to reduce risks for both savers and investors. The fact that some companies can involve greater risk than others can be balanced in a well-differentiated financial market by savers spreading their savings across different forms, buying different shares, bonds, shares in mutual funds that in themselves represent a risk spread, and by depositing some in banks. A company that takes on debt in order to make profits in future through sales on foreign markets can protect itself against exchange rate fluctuations by signing futures contracts, which state when and at what prices future income will be converted to kronor. The company can also buy input goods, such as oil, and sell, for instance, pulp at a forward rate, so that the company knows for certain what its future costs and income will be. It costs to do this, but the company then faces no risks. It is quite simply a form of insurance. BIS Review 9/2002  3  When it comes to smaller companies and individual households, the securities market is hardly a suitable alternative. The risks for operators on the capital market are difficult to assess and the costs of the transactions have to be spread out over large amounts. Instead, banks and insurance companies supply services to small companies and households. The banks act as intermediaries, who receive deposits that are liquid and convert them into long-term lending, so that savers' requirements can be reconciled with the needs of the investing company.