The Regional Seminar on “Corporate Governance for Banks” held in Macao

The Regional Seminar on “Corporate Governance for Banks”, jointly organised by the Financial Stability Institute (FSI) and the South East Asia New Zealand Australia (SEANZA) group of central banks and hosted by the Monetary Authority of Macao (AMCM), was held on 22nd – 24th April at the Convention and Exhibition Centre of Macau Fisherman’s Wharf. The FSI was established in 1999 by the Bank for International Settlements and the Basel Committee on Banking Supervision to assist financial sector supervisors around the world in strengthening their financial systems through training, publication and information exchange, while SEANZA is a financial supervisory organization founded by the central banks in Southeast Asia, Australia and New Zealand in 1956; the Monetary Authority of Macao (AMCM) became a member in 1998. This was the first time that the FSI and the SEANZA held a seminar in Macao. The seminar was attended by 26 delegates from central banks and banking supervision authorities of Australia, Bangladesh, Mainland China, Hong Kong, India, Macao, Malaysia, Nepal, Philippines, Sri Lanka and Thailand. In addition to experts from the FSI and the Basel Committee on Banking Supervision of Switzerland, guest speakers include those from the OECD, Banque de France, US Federal Reserve, Hong Kong Monetary Authority, Standard Chartered Bank, UBS and Ernst & Young. The Chairman of the Board of Directors of the AMCM, Mr. Anselmo Teng, delivered the welcoming remarks in the opening ceremony of the seminar. Chairman Teng pointed out that effective corporate governance practices are indispensable to maintaining trust and security in the financial system. Different from other sectors, financial institutions, particularly credit institutions, have duties of care not only to their shareholders but also other stakeholders, namely, depositors and the public at large. As the financial regulator of the Special Administrative Region, the AMCM has undertaken measures to strengthen corporate governance of the financial sector. Following supervisory guidelines issued by the AMCM in recent years, institutions are encouraged to enhance their corporate governance regime, such as the emphasis of high integrity standards applied to the board of directors and senior management, appropriate measures for checks and balances as well as segregation of duties, in line with the corporate governance principles advocated by the international community. The recent challenges experienced by several major international financial institutions arising from subprime fallout, have highlighted the importance of maintaining high standard of corporate governance. Against this backdrop, the seminar was both timely and relevant. The seminar was three days in duration and addressed such issues as the latest international principles of corporate governance, risk management and its role, the compliance function in banks, controls on related party transactions, enhancement in bank transparency and disclosures, internal control systems, external audits and their role as well as corporate governance in state-owned commercial banks.