BUCHAREST, July 29, 2014—The President of the Financial Supervisory Authority (ASF), Mişu Negriţoiu, and the World Bank’s Country Manager for Romania, Elisabetta Capannelli, today signed a Memorandum of Understanding (MOU) to provide technical assistance to transform ASF’s institutional and organisational structure.
The purpose of this MOU is to support ASF in:
- optimizing its organisational architecture in line with the mechanisms that are suitable for an integrated multi-sectoral financial supervisory authority; and
- improving the legal framework while strengthening ASF’s own supervisory mechanism.
According to the MOU, a team of World Bank experts will evaluate ASF and provide recommendations in several areas that are connected to ASF’s organisational structure and optimizing its internal processes.
The first objective is to strengthen the integrated institutional capacity and the supervisory function in three sectors: insurance, capital market, and private pensions. The experts will also look at the support functions and multi-department architecture and will make recommendations on improving costs and allocation of resources. This analysis will also focus on the IT infrastructure evaluation and will look at how certain processes can be automated.
In addition, the analysis will identify the shared expertise areas for the three markets that are under ASF’s supervision, and will also propose integrated supervisory approaches and recommendations for the legal framework so that ASF can sustainably ensure both market development and financial stability.
‘‘This Memorandum of Understanding is part of the development vision of the Financial Supervisory Authority, as an integrated authority. We want to increase the efficient supervisory capacity and to harness the best strategies that the World Bank can provide. At the end of the day, both non-banking financial service consumers and the entities placed under supervision will get benefits. Efficiency is about lower costs for everybody in the long-run and better results for the development of the market and financial stability,” said Mişu Negriţoiu, President of ASF.
“The World Bank today signed an agreement for a high level diagnostic review of the regulatory, supervisory, and organizational issues that will be instrumental in ensuring that the Financial Supervisory Authority has the best institutional structure and processes,” said Elisabetta Capannelli, World Bank Country Manager for Romania. “We believe that the Financial Supervisory Authority reform efforts will set the tone for the modernization of the three markets where the Authority has both a supervisory and a market development role. The Financial Supervisory Authority was established from the merger of three previously separate autonomous institutions with duties and prerogatives in securities, insurance, and private pensions – an efficient integrated approach will be useful to all the market participants while maintaining the safety and soundness of the sectors.”
The joint ASF - World Bank program costs $173,040, of which about 25 percent is contributed by ASF and the remainder is provided by the World Bank as non-reimbursable funding.
This evaluation and analysis project will run until August 28, 2014, and the complete results and recommendations of the World Bank experts will be available and may be implemented after September 1, 2014.