Criteria for the Regulation & Supervision Awards

Regulators will be evaluated according to three basic functions of regulatory oversight that they may perform - macroeconomic regulation, systemic and prudential regulation and conduct of business oversight and their effectiveness in fulfilling these roles. This is done using three scorecards developed to capture the essence of the role of regulators, their effectiveness and the benchmarks they need to adhere to. The indicators used to evaluate the dimensions listed in each of these scorecards, tend to be more qualitative rather than quantitative. This is because an assessment of this kind needs to take into account the various shades of grey that exist around how regulators go about performing their duties. We believe a binary scoring model would not be able to capture the true essence of regulation, given its peculiar challenges and constraints.

Balanced Scorecard for the Best Macroeconomic Regulator Awards

This scorecard has been designed primarily to assess and benchmark central banks and the role that they play in maintaining financial stability. Central banks use risk management, monetary analysis and liquidity management as the core tools to ensure macroeconomic financial stability. These combined with other indicators such as their perception among domestic banks and businesses, level of international co-ordination and the level of technology and operations can help assess regulators of this kind.

Balanced Scorecard for the Best Macroeconomic Regulator Awards

Keeping in check, the build-up of systemic risk in the system- safeguarding the so called too big to fail financial institutions, the collapse of any one of which can paralyze the entire financial system- is understood to be the job of the macro- prudential regulator responsible for the oversight of all deposit-taking institutions. This scorecard assesses how the regulator perceives its own role, whether it has the capability to carry out that role and if it does a good job in fulfilling that role. In this scorecard we rely heavily on the philosophy of looking at what the regulator does rather than the approach it uses as evidenced in evaluating dimensions that take into account, the health of the systemically important institutions being regulated.

Best conduct of business regulator

The conduct of all firms, including all those authorised and subject to prudential supervision and their dealings with ordinary retail consumers, in wholesale markets and market conduct in general falls under the purview of the conduct of business regulator. The main idea behind its existence is to be able to ensure confidence in financial services and markets, with a particular focus on protecting consumers and ensuring market integrity. Apart from being transparent and independent, the composition of the regulatory board - industry players being a part of the board- play a major role in measuring its effectiveness.