Ver Angola

Banking and Insurance

BNA prepares application to obtain supervisory equivalence with the European Commission

The National Bank of Angola (BNA) decided to start the formal process to obtain regulatory and supervisory equivalence with the European Commission in order to facilitate the cross-border activity of financial institutions, according to a note from the regulator.

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“The implementation of regulations and supervisory processes similar to those applicable in the European Union and the exchange with the supervisory authorities of the Eurozone will definitely contribute to a more solid, secure and sustainable national financial system”, justifies the BNA.

In addition, he adds, "obtaining equivalence will allow a much more expressive involvement of the European Union (EU) financial institutions with Angola, which should result in mutual benefits for the markets and institutions of the various countries of the EU and Angola".

This equivalence facilitates cross-border activity "by creating a solid common prudential environment, for which it is necessary for third countries to adopt the same high standards of prudential rules in force in the EU".

The first assessment of third countries by the European Commission with a view to recognizing equivalence took place in 2014, having at that time considered that there were only 17 countries with equivalence for attribution by the European Union's Single Banking Supervision Mechanism (Australia, Brazil, Canada, China, Guernsey, Hong Kong, India, Isle of Man, Japan, Jersey, Mexico, Monaco, Saudi Arabia, Singapore, South Africa, Switzerland and the United States of America).

The BNA estimates that the process will take up to five years, developing in three phases: alignment of regulation and prudential supervision processes (SREP); execution of the supervision cycle with equivalent regulations and processes in collaboration with European supervisory authorities; and application for supervisory equivalence and involvement of international authorities.

The detailed prudential requirements for credit institutions in terms of capital requirements, definition and measurement of risk for credit, market and operational risk, liquidity and leverage are defined in the Capital Requirements Regulation (CRR)

In 2013, the European Union (EU) adopted a legislative package that includes the CRR and the Capital Requirements Directive (CRD), with the aim of strengthening banking sector regulation and ensuring a more solid and secure financial system. .

The CRD deals with supervisory procedures and processes to ensure effective monitoring of governance and risk practices and provides requirements on corporate governance provisions and rules that aim to increase the effectiveness of risk oversight.

The CRR also provides that certain categories of exposure to entities located in countries outside the EU, including their central governments, can benefit from the same (more favorable) treatment applied to exposures to EU countries in terms of capital requirements, when the Commission Commission determines that a third country's prudential supervision and regulatory requirements are at least equivalent to those applied in the EU.