Banks, Direct Speech, Financial Services, Lithuania

International Internet Magazine. Baltic States news & analytics Tuesday, 23.07.2019, 06:16

Bank of Lithuania to operate not only as heavy-handed demanding regulator

Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania., 20.02.2017.Print version
The absolute majority of financial market participants supervised by the Bank of Lithuania acknowledge that supervision by the central bank is effective, while the respondents assess highly the competence and behaviour of the supervisory staff – this is reflected in the results of the first survey of this kind. Market participants expect consultancy and assistance from the central bank, as well as quick response to inquiries and notifications, enhancement of submission of electronic documents.

‘An open dialogue with supervised market participants is one of the fundamental principles in creating a financial sector regulatory environment that is open for innovations, attractive and competitive. Therefore, having carried out a survey and taken into account the proposals from market participants, we are implementing a whole package of measures increasing effectiveness and cooperation with market participants.

After surveying 350 representatives of supervised financial institutions it became clear that nearly 80% of them believe that the supervision carried out by the Bank of Lithuania is effective rather than not effective or very effective. Most of the respondents assessed highly not only the professional competence of the supervisory staff, but their behaviour in communicating with market participants as well: employee cooperation was assessed as very good or good rather than not good by four out of five surveyed.

When asked about areas to be improved, the respondents reported that options to submit documents electronically should be provided. The respondents hold the view that the Bank of Lithuania should supervise all of the financial market participants on a more equal basis, apply proportional requirements for both small and large market participants, delve deeper into the circumstances of infringements, consult more on draft legal acts under preparation, and help market participants. In addition, market participants expect a more prompt reaction to remarks given concerning infringements on legal acts by other market participants.

Taking into account the proposals from market participants, the Bank of Lithuania has already implemented some of the changes or is going to implement them in the near future. For instance, periodical meetings with financial market participants are planned – during them, the planned changes in the regulatory environment will be presented; consultations regarding elimination of administrative barriers will take place. The regulatory requirements for the assessment of the existence of an excessive administrative burden will also be reviewed in the year to come. The licensing process will concurrently be reviewed to simplify and accelerate it as much as possible. The Bank of Lithuania will also implement the one stop shop principle for organising meetings with potential financial market participants and their consultancy.

In order to speed up informing of market participants, they are encouraged to use the electronic document delivery system, while already in the near future the Bank of Lithuania’s document management system will be adapted to electronic signatures, thereby providing the possibilities for submitting all documents electronically.

To speed up its response to notifications of infringements being made, the Bank of Lithuania has already introduced a ‘whistle-blower’ system that ensures protection of whistle-blowers’ identity data, providing the possibility to notify of infringements anonymously. This system will provide opportunities for identifying and investigating infringements that are difficult to identify using routine measures, e.g. cases of market abuse.

As of this year, the Bank of Lithuania started publishing an advance schedule of planned inspections. It is thereby aimed to ensure smoother cooperation between the supervisory authority and market participants, faster submission of supervisory information. However, unexpected, target inspections will further be carried out if needed without notifying entities thereof.

In its strategic operational directions for 2017–2020, the Bank of Lithuania plans to become a financial sector partner encouraging innovations and sustainable financial market growth. By reducing administrative barriers, we aim that supervised entities financial market participants assess supervision and the regulatory environment as favourable.

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