• Basel Committee
    According to the Basel Committee on Banking Supervision’s paper entitled “Compliance and the compliance function in banks,” what are the responsibilities of the board of directors for compliance?

    According to the Basel Committee on Banking Supervision’s paper entitled “Compliance and the compliance function in banks,” the bank’s board of directors is responsible for overseeing the management of the bank’s compliance risk. The board should approve the bank’s compliance policy, including a formal document establishing a permanent and effective compliance function. At least once a year, the board or a committee of the board should assess the extent to which the bank is managing its compliance risk effectively.

  • Basel Committee
    According to the Basel Committee on Banking Supervision’s paper entitled “Customer Due Diligence for Banks,” how are sound KYC procedures relevant to the safety and soundness of banks?

    • They help to protect banks’ reputation and the integrity of banking systems by reducing the likelihood of banks becoming a vehicle for or a victim of financial crime and suffering consequential reputational damage, and
    • They constitute an essential part of sound risk management (e.g. by providing the basis for identifying, limiting and controlling risk exposures in assets and liabilities, including assets under management).