Page 22 - Annual Report 2022 EN
P. 22
/ 22 T ABLE OF C ONTENT S
The QFCRA’s Supervision and Authorisation division consists of the Authorisation, Bank and
Insurance Supervision (BIS), Investment Manager, Advisor and Securities Supervision (IMAS), and
Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Supervision departments.
Bank and Insurance Supervision
The Bank and Insurance Supervision (BIS) team Supervisory priorities for 2022
supervises 11 banks and 12 insurance companies,
most of which are set up as branches or subsidiaries Risk and vulnerabilities to I. Ensuring robust prudential standards III. Enhancing the prudential reporting
of international institutions and rely heavily on the global banking system are in place, and hold regulated firms, their and assurance framework.
their parent companies for operational support. — governing bodies, and senior management Supervision continued its work with QFC firms
There are also domestically owned institutions The world’s economic outlook worsened due to accountable for meeting these standards. and their auditors to improve consistency and
licensed and regulated by the QFCRA. persistent high inflation and tightening financial The QFCRA finalised a bank regulatory framework disclosure standards in financial reporting with a
conditions linked to the fallout from the COVID-19 that aligns with Basel III standards and will apply targeted focus on expected credit loss accounting
pandemic and exacerbated by Russia’s invasion of proportionately to QFC banks starting 1 January 2024. and IFRS 17 implementation for insurers.
Ukraine. Central Banks responded with rapid and The QFCRA participates in the Basel Consultative
a. Expected Credit Losses
synchronised tightening of monetary conditions, Group and Basel Core Principles Task Force to
The BIS team continued to work closely with
leading to increased borrowing costs and resultant support wider regulatory work. The division is also
banks and their auditors to ensure consistency
risks in banks’ balance sheets. BIS focused on involved in the International Association of Insurance
and high-quality disclosures regarding expected
these risks in the QFC financial system in 2022. Supervisors (IAIS) regulatory initiatives and engages
credit loss accounting (ECL) and its impact on
with global Islamic finance standard setters such
capital ratios. Additional audit and assurance
as the Islamic Financial Services Board (IFSB) to
requirements were developed to consistently
Bank business models develop and enhance regulatory standards.
implement regulatory and accounting requirements,
—
especially during the COVID-19 pandemic.
BIS examined how the economic environment affected II. Ensuring firms are adequately capitalised
the bank’s business models, assessed asset quality, and have sufficient liquidity for the risks
b. IFRS 17 for Insurers
and analysed QFC institutions, funding and liquidity they are running or planning to take.
The QFCRA is progressing with IFRS 17
strategies in response to evolving risks, including volatile The banking team conducted thematic assessments
implementation, with the final phase involving
interest rates and tightening financial conditions. of asset quality in vulnerable sectors and asset
engagement with insurers on readiness testing
classes to evaluate the financial risks and impacts
and parallel runs with QFC insurance firms.
In response to the highlighted economic challenges and of COVID-19. Credit risk remains the main risk for
New prudential reporting forms have been
in fulfilment of its regulatory and supervisory mandate, QFC banks, and increased sector monitoring was
designed and rolled out for consultation with
the Supervision team maintained its focus on the undertaken due to COVID-19’s impact on supply
insurers and their auditors. The QFCRA is on
following strategic imperatives: chains, inflation, and interest rate increases.
track to meet the IFRS 17 implementation
roadmap by the deadline of 1 January 2024.
