Supervisory Rules Research Articles

The Netherlands: A New Dutch IORP

Through the PPI the Netherlands will position itself as an excellent location for the establishment of cross-border operating pension vehicles (institutions for occupational retirement provision, IORPs). Several factors contribute to this:– It is a relative simple and transparent vehicle; – It has a competitive tax regime; and – It benefits from the mature Dutch pension industry as well as a transparent and solid set of Dutch supervisory rules.

Expert control for a stable operation of a partial nitrification system to treat highly concentrated ammonium wastewater

This work presents the application of expert control strategies for a successful and stable operation of partial nitrification. A high-strength ammonium wastewater was treated in a continuous pilot plant with a configuration of three reactors in series plus a settler. The system was operated at mild temperature (around 25 degrees C) and at high sludge retention time to obtain a significant nitrifying biomass concentration. The implemented control system with expert supervisory rules provided a stable and robust operation of the partial nitrification system even when the pilot plant was subjected to several disturbances as change in influent concentration, failure of aeration in one reactor and operation with variable biomass concentration. The control system was based on local feedback control loops for dissolved oxygen and pH with proper setpoints for nitrite oxidizing bacteria (NOB) inhibition and an inflow control loop based on Oxygen Uptake Rate (OUR) measurements, which allowed working at the current maximum ammonium oxidation capacity. Two additional expert rules were implemented for automatically determine the required OUR setpoint in accordance with the biomass activity and to produce a fast load decrease when a system overload was detected.

Towards a Global Approach to Reinsurance Regulation

The article examines how supervisory rules and other regulations (can) restrict or impede reinsurers’ access to the insurance markets. The authors make a plea for an international supervisory regime for reinsurance companies, which could be achieved through bilateral agreements between countries. Special provisions in free-trade and partnership agreements could also play a role.

Controller Switching Strategy for Constrained Systems and Its Application to Hard Disk Drives

We propose a switching control strategy for systems with state and control constraints. Prior studies have proven that switching control strategies have the ability to meet performance objectives, such as fast response and good disturbance rejections, while avoiding constraint violations. The controller is selected on-line from a given set of controllers by supervisory rules based on the concept of a maximal output admissible set. The selected controller needs to be appropriately initialized during switching, but how to decide the controller's initial state is still a problem. This paper proposes a method that utilizes an initial value compensation (IVC) technique for determining the initial state of the controller. The IVC technique has the following features. First, the controller's initial state is chosen according to the plant's initial state. Therefore, the number of variables that the supervisory rules need to consider is reduced. Second, smooth and fast transient responses can be obtained after switching, therefore the region of the closed-loop initial state variables that satisfy the desired response specifications under the given constraints can be expanded. Experimental evaluations of the proposed switching control strategy were performed with a 2.5-inch form-factor hard disk drive.

The new supervisory rules regime: a practical look at areas of exposure for broker‐dealers and senior personnel

PurposeThe purpose of this paper is to describe the exposure and the responsibilities of a broker‐dealer's senior management under NASD's and the NYSE's new rules, emphasizing a regular review of supervisory and compliance systems.Design/methodology/approachDescribes new rules, contained primarily in NASD Rules 3010, 3012, and 3013 and amendments to NYSE Rule 342, and the SROs' intentions underlying those rules; provides additional regulatory guidance on privilege issues related to CEO/CCO meetings and reports, documentation of compliance with the new rules, periodic review of office category designations, specific requirements for “offices of convenience,” and procedures to ensure up‐to‐date identification of producing managers; assesses the potential increase in exposure for CEOs, CCOs, and others under the new rules.FindingsBoth the NASD and the NYSE have made clear by their establishment of the new supervisory framework and in guidance to members that they expect increased attention to maintaining adequate compliance and supervisory systems at the highest levels of their member organizations.Originality/valueConveys an important message concerning the need for CEOs and CCOs to become increasingly involved in compliance reviews and knowledgeable about supervisory systems.

Cyprus: Assessment of Financial Sector Supervision and Regulation, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision, Insurance Supervision, and Securities Regulation

The report summarizes the assessment of Financial Sector Supervision and Regulation on Reports on the Observance of Standards and Codes (ROSC) on banking supervision, insurance supervision, and securities regulation of Cyprus. The report assesses that the financial system in Cyprus is in a process of reform generated by liberalization and regulation owing to accession to the European Union. The paper analyzes competency in the banking sector and technical supervisory rules, and assesses its strengths and vulnerabilities in the implementation of financial standards mainly in cross-border cooperation, information exchange, and consolidated supervision.

Supervisory controls

The focus on supervision began in the 80’s when the insider trading scandal resulted in visions of Wall Street investment bankers in handcuffs being led away from their offices. The New York Stock Exchange was on the hot seat for perceived failings. The 90s were dominated by the “price‐fixing” scandal in the over‐the‐counter markets, with OTC traders and the NASD sharing the limelight. Then there were mutual fund late trading, research, variable annuities, 529 college savings plans, etc., Now a branch manager in Cleveland, Ohio has precipitated a new wave of supervisory rules.

Investigation of practical issues in building thermal parameter estimation

Practical issues in implementation of recursive least-squares techniques are investigated through experiments for the robust parameter estimation of a building's thermal processes. A set of supervisory rules is derived from the basic physical laws and the necessary conditions for stable systems. An approach to robust parameter estimation of a building's thermal systems is developed and implemented for the real-time identification of an outdoor test-room with high solar gains and radiant heating. Experimental results show that the room temperatures computed by the identified models agree well with the measured data.

The Barings crises of 1890 and 1995: causes, courses, consequences and the danger of domino effects

The Barings crises of 1890 and 1995 ensure Barings place in banking history. In the crisis of 1890, the liquidity problems experienced by Barings in London were the result of its heavy investment in Argentina. The massive sale of American securities by London was a desperate attempt to save Barings from illiquidity. This, in turn, led to bank failures in the United States, creating a domino effect. These failures could not have been prevented by a lender of last resort, since the problems which brought down American banks were not liquidity but solvency problems. Barings eventually failed 105 years later in the 1995 crisis. Its insolvency was caused by Leeson's heavy speculative trading in financial derivatives, which was, in turn, facilitated by a lack of proper internal and external controls. Several reasons ultimately prevented domino effects in the 1995 crisis. After both banking crises, new supervisory rules were introduced.

Harmonisation and Legal Transplantation of EU Banking Supervisory Rules to Transitional Economies. A Legal Approach

This paper is part of the PHARE-ACE research project (No 96-6009-R), entitled: Future of Banking Supervision and Regulation in selected transitional economies in relation to European Monetary Union. The working paper examines how different CEECs (Slovenia, Hungary, Czech Republic) are adapting their banking systems to the acquis communautaire, and the effects and possible limits of transplantation of the EU rules to economies in transition. The first part of the paper outlines the general principles of the relations between the EU and individual transitional countries, in order to find out to which extent the latter are bound to incorporate the acquis communautaire into their national legal systems. The second part examines the changing legal environment of banking in the selected CEECs and compares some of its features to the existing European and international supervisory standards. Part III analyzes the scope, effects and possible limits of transplantation of EU supervisory standards to the CEECs. In particular, attention will be paid to the specific function of EU harmonization in a perspective of market integration, and the question whether these rules should be adapted to the specificities of the market environment in which they will have to operate. The prospects and limits of legal transplantation are exemplified through a case study on deposit guarantee systems.

An Appraisal of the Rules and Procedures of Bank Supervision, 1929-39

R ULES and procedures of bank supervision may be appraised by reviewing their operations over the last ten years. From this standpoint the decade seems to fall into three distinct periods. From I930 to the banking holiday in I933 supervision was faced with panic, crisis, and deposit contraction. After the holiday until roughly the middle of I934 the supervisors fostered reorganization of weak banks, encouraged the sale of bank stock to the Reconstruction Finance Corporation, and, in general, reinstituted classic supervisory rules and procedures. During the succeeding years supervisors have been intermittently charged with impeding recovery and have consequently made some revision of the traditional rules and procedures.