Mr. President Negritoiu,
Ladies and gentlemen,
Welcome to the World Bank office for the World Bank – Financial Supervisory Authority signing of the Miscellaneous Advisory Services Agreement on an Institutional Analysis of the Authority’s Functional Organization and Supervisory Approach. I would like also to thank the press for responding to our invitation to the ceremony.
Under the new leadership, the Authority is undergoing a process of reorganization, integration and consolidation. This is in order to operate more effectively as a supervisory agency, and to modernize its approach and methods.
Against this backdrop, the Authority requested the World Bank technical assistance for a high level institutional review and reform recommendations. The Bank is ready to help and bring best-in-class global expertise on institutional review, business architecture, and integrated non-banking supervision of the three markets covered by the Authority: securities, insurance, and private pensions.
The Authority faces several challenges. Therefore, it needs a new institutional strategy and vision to guide its reform. This implies there is need for a significant change in corporate culture, and approach towards its core functions. To ensure that management and staff focus their thinking on regulation and supervision to meet the upcoming market need is particularly important. This is important both in terms of EU and international practices, as well as in terms of assuring that the Romanian financial markets develop unimpeded, but with appropriate safeguards.
One of the most notable challenges is the harmonization of its regulatory and consistent supervisory approaches across the different sectors of the non-bank financial system.
Besides this harmonization, the Authority also requires upgrade and modernization of its regulatory approach, and a reorientation of its supervisory methods from strictly compliance-oriented to risk-based supervisory tactics.
Also, we should not forget the context: the European Union is currently going through a comprehensive institutional reform of the financial markets. Romania should be able not only to absorb changes initiated at Commission level but also to contribute to shaping the new regulatory environment and the Financial Services Authority is a key dialogue partner.
Several of these reforms will be greatly facilitated via the modernization and updating of the Authority’s IT capabilities and overall business architecture, which should also reduce the number of internal transactions, compliance checks, approvals, reviews and controls, that are currently used to conduct the daily business.
Last but not least, it is of the utmost importance that the Authority has a continuous and collaborative dialogue with the supervised financial industries, recognizing that they can provide a valuable role in identifying market needs, risks, and ideas for both market development and effective supervision.
The work will provide a short term assessment and recommendations toward the Authority’s reorganizational needs. It will include a roadmap for implementing an institutional restructuring that will i.) generate organizational efficiencies, and ii.) emphasize on common areas of professional collaboration to result in a more functionally integrated institution of the former three supervisory authorities.
We look forward to provide the Authority with the needed evidence-based solutions. We are looking forward to continue the very good collaboration we already started together. And I would like to emphasize that the reform efforts under the new presidency are extremely important for these three sectors of Romania’s economy.