The universe of supervisory mandates - total eclipse of the core?

Most banking supervisory authorities are charged with multiple mandates in addition to their core responsibility of fostering the safety and soundness (S&S) of banks and the banking system. Some of these mandates may conflict with, or divert scarce supervisory resources away from, the core S&S function. This paper takes stock of supervisory mandates in 27 jurisdictions and explores how banking supervisors interpret and navigate the S&S remit among other objectives. We find that most surveyed authorities have at least 10 or more objectives, accentuating potential tensions with their S&S remit – whose scope and complexity have increased over time. 

In this context, we outline a range of initiatives that some supervisory authorities take to deliver on their core S&S remit, while minimising potential tensions with other objectives. Nevertheless, the staggering range of objectives imposed on supervisory authorities highlights the extraordinary pressure placed on supervisors to juggle multiple responsibilities and risks diluting their ability to deliver on the core S&S mandate.

JEL classification: G21, G28

Keywords: banking regulation, banking supervision, supervisory independence, supervisory mandates, supervisory objectives