Supervisory methods

CNB Banking Supervision uses two basic supervisory methods - off-site surveillance and on-site examinations.

Off-site surveillance involves monitoring banks´ activities using all available information (reports and returns submitted by banks in compliance with the CNB`s standard methodology, auditors´ reports, information obtained directly from banks on an ad hoc basis, publicly available databases, etc). Each bank is subject to regular analysis and assessment in accordance with uniform criteria, and the results obtained are then used to determine the need for further monitoring, on-site examinations, remedial measures and the like. The information obtained from off-site surveillance is also used to draw up comprehensive analyses of the banking sector.

Inspections carried out directly in banks - known as on-site examinations - are gradually becoming the main tool of banking supervision. This is chiefly due to the greater emphasis being placed on assessing the individual risk management systems within banks. Knowledge of the risk profile of each bank allows supervisors to choose the optimum form of oversight and thus to maximise the quality and effectiveness of the monitoring and to make efficient use of supervisory capacity and time.