The Central Bank of Sri Lanka (CBSL) entered into a Memorandum of Understanding (MoU) with the Securities and Exchange Commission of Sri Lanka (SEC) and the Insurance Regulatory Commission of Sri Lanka (IRCSL) on December 31, 2018 at CBSL, to conduct effective consolidated risk-based supervision and for CBSL to be the lead supervisor in this regard.
Consolidated supervision is an essential tool for supervising financial groups. It involves assessment of group-wide risks that may emanate from relationships among members of a corporate group operating across different financial sub-sectors. Group-wide consolidated supervision of such institutions is necessary in order to evaluate and assess contagion and reputation risks posed by such entities to the financial system and to contain systemic risk.
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