Title Page
TECHNICAL NOTES AND MANUALS
Resolving Opaque Bank Ownership and Related-Party Exposures
Edda Rós Karlsdóttir, Rachid Awad, Ender Emre, Alessandro Gullo, Aldona Jociene, and Constant Verkoren
Authorized for distribution by Tobias Adrian and Rhoda Weeks-Brown
This note intends to provide advice to bank supervision and resolution authorities and policymakers seeking to deal with opaque bank ownership or significant overhang of related-party exposures.1 The note addresses the following issues:
Discusses how international standards aim to ensure effective oversight of bank ownership structures and related-party transactions, and prudent management of the ensuing risks to the banks’ viability and
financial integrity.
Discusses opaque bank ownership structures and excessive related-party exposures and transactions, and the risks they pose to financial stability when they reach systemic proportions.
Discusses how these can be addressed in the context of a comprehensive financial sector restructuring strategy that aims to discover and remediate the root causes of banking sector problems.
Illustrates a diagnostic framework that has proven useful in identifying banks’ beneficial owners and related-party exposures and transactions.
Discusses possible mechanisms to remove nontransparent or unsuitable shareholders and how to unwind excessive related-party exposures of systemic proportions.
Touches upon the treatment of bank owners and other related parties in resolution.
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© 2024 International Monetary Fund Cover Design: IMF Creative Solutions
Cataloging-in-Publication Data
IMF Library
Names: Karlsdóttir, Edda Rós, author. | Awad, Rachid, author. | Emre, Ender, author. | Gullo, Alessandro, author. | Jociene, Aldona, author. | Verkoren, Constant, author. | International Monetary Fund, publisher.
Title: Resolving opaque bank ownership and related-party exposures : Edda Rós Karlsdóttir, Rachid Awad, Ender Emre, Alessandro Gullo, Aldona Jociene, and Constant Verkoren.
Other titles: Technical notes and manuals.
Description: Washington, DC : International Monetary Fund, 2024. | TNM/2024/02. | Includes bibliographical references.
Identifiers: ISBN:
9798400258404 (paper)
9798400258459 (ePub)
9798400258435 (web PDF)
Subjects: LCSH: Banks and banking—Ownership. Classification: HG1601.K3 2024
DISCLAIMER: This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this paper are those of the authors and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Recommended citation:
Karlsdóttir, Edda Rós, Rachid Awad, Ender Emre, Alessandro Gullo, Aldona Jociene, and Constant Verkoren. 2024. “Resolving Opaque Bank Ownership and Related-Party Exposures.” IMF Technical Notes and Manuals 2024/02. International Monetary Fund, Washington, DC.
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PO Box 92780, Washington, DC 20090, USA
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Contents
Abbreviations
I. Introduction
II. Ownership Transparency and Suitability
Good Practice in Bank Ownership Transparency and Suitability
Addressing Systemic Problems with Opacity in Bank Ownership
III. Related-Party Identification and Risk Mitigation
International Good Practices on Mitigating Related-Party Risk
Dealing with Related-Party Exposures of Systemic Proportions
IV. Conclusions
References
Abbreviations
| AML/CFT | Anti–money laundering/combating the financing of terrorism |
| BCBS | Basel Committee on Banking Supervision |
| BCP | Basel Core Principles for Effective Banking Supervision |
| FATF | Financial Action Task Force |
| G20 | Group of Twenty, Forum for International Economic Cooperation |
| IMF | International Monetary Fund |
| OECD | Organisation for Economic Co-operation and Development |
Country references in this note are based on authors’ own understanding of the relevant domestic legal framework. Such references should not be treated as the authorities’ official interpretation.