114. V Beattie, S Fearnley’ and R Brandt Behind Closed Doors: What
Company Audit is Really About (ICAEW) 2001 at page 26
115. See Basel Committee on Banking Supervision “Enhancing
Corporate Governance for Banking Oiganisations" February
2006 at page 4
116. Basel Committee for Banking Supervision, “ Enliancing
Corporate Governance for Banking Organisations” 2006 at
page 4
117. ibid at page 5
118. ibid
119. ibid
120. See particularly Principles 1-3 which relate to management
oversight and the control culture; ibid at pages 2 and 3
121. ibid at page 4
122. ibid at pages 4 and 5
123. Paragraph 16, as well as other sections which address and relate
to internal and risk controls in particular, are considered to
have the greatest importance out of all the sections within
the BCBS Principles for Sound Liquidity Risk Management and
Supertrision of September 2008
124. See paragraph 142 of BCBS Principles for Sound Liquidity-
Risk Management and Supervision of September 2008
125. See “Monitoring Activities and Correcting Deficiencies”
Framework for Internal Controls in Banking Organisations,
Basel Committee on Banking Supervision 1998 at page 30
126. See ibid at paragraph 10
127. See ibid at paragraph 11
128. See Consultative Document ,IntenMttoiMl Framework For
Liquidity- Risk Measurement, Standards and Monitoring
December 2009
129. Treasury Committee Barings Bank and International
Regulation Report No 1 (1996) at page xiv
130. Consultative Document ,InteriMtional Framework For
Liquidity’ Risk Measurement, Standards and Monitoring
December 2009
131. See HRVieten, „Banking Regulation in Britain and Germany
Compared: Capital Ratios, External Audit and Internal
Controls" (1997) at page 18
132. Framework for Internal Control Syrstems in Banking
Organisations, page 25 Basel Committee on Banking
Supervision 1998
133. ibid
134. See „The Relationship between Banking Supervisors and
Banks’ External Auditors January 2002 paragraph 40 page 11
< http : / ∕∖uww. bis. org∕publ/Ixbs 8 7 .pdftιojrames = 1>
135. See Framework for Internal Control Systems in Banking
Organisations, Basel Committee for Banking Supervision 1998
at page 23
136. ibid at page 20.
137. ibid
138. See J Black, „Forms and Paradoxes of Principles Based
Regulation'4 LSE Law, Society and Economy Working Papers
13/2008 (2008) at page 9 http.'∕∕u>ιvu>.lse.ac.uk∕collections∕∕au>∕
tups∕u>ps.htm and http://www.ssrn.com/abstarct= 1267722
139. ibid
140. ibid at page 16
141. See J Black, „Forms and Paradoxes of Principles Based
Regulation" LSE Law, Society and Economy Working Papers
13/2008 (2008) at page 12
142. ibid
143. ibid at page 17
144. See also 1 Ayres and J Braithwaite, Responsnx Regulation
(1992)Oxford University Press
145. See R Baldwin, Rules and Government (1995) Oxford :
Chrendon Press
146. J Black, „Forms and Paradoxes of Principles Based Regulation"
LSE Law, Society and Economy Working Papers 13/2008
(2008) at page 19; She argues that “in a regime with a tough,
punitive approach in which every infraction is met with a sanc-
tion, principles based regulation (PBR) would not survive—
this being the case, because there is greater risk that firms will
make the wrong assessment ie one with which the regulator
does not agree.” Under principles based regulation, she argues
further, “firms are required to think through the application of
the provisions to particular situations to a far greater degree
than they are with respect to a detailed rule—hence the higher
probability that firms would make the w,rong assessment." See
ibid at page 18
147. J Black, „Forms and Paradoxes of Principles Based Regulation"
LSE Law, Society’ and Economy Working Papers 13/2008
(2008) at page 19; It is further argued that “Different rule types
make it easier for regulatory officiais to deal w,ith certain types
of regulated firms.”
148. See ibid at pages 25 -35
149. Refer to Formal Principles Based Regulation; ibid at page 12
150. “The frequency of monitoring different activities of a bank
should be determined by considering the risks involved and
the frequency and nature of changes occurring in the operat-
ing environment.” See Framework for Internal Control Systems
in Banking Organisations at page 20 http://tvwm.bis.oig/publ/
bcbs40.pdf
151. See also Principle 10 of the Principles tor the Assessment of
Internal Control Systems; Framework for Internal Control
Systems in Banking Organisations at page 20 http://iuwiu.bis.
org∕publ∕bcbs4(Lpdf. “Monitoring the effectiveness of internal
controls could be undertaken by personnel from several dif-
ferent areas, including the business function itself, financial
control and internal audit. For that reason, it is important that
senior management clarify- which personnel are responsible
for which monitoring functions." Further, “monitoring should
constitute part of the daily activities of the bank—whilst
including separate periodic evaluations of the overall internal
control process, "∙,ibid
46 ∙ Banking & Financial Services Policy Report
Volume 30 ∙ Number 9 ∙ September 2011