Committee on Banking Regulations and Supervisory Practices

Summary of Committee On Banking Regulations And Supervisory Practices

Known commonly as the Cooke Committee, a working party established under the auspices of the Bank for International Settlements (read about this international financial institution for further details) in 1975 to seek to remedy inadequacies in the supervision of banks operating outside their home countries. Because of differences in national banking laws, a bank might be able to operate overseas, beyond the scrutiny of bank regulators, in a jurisdiction where its operations were not considered “banking”under local laws; in such cases, a bank might operate without any regulatory oversight. In addition, local bank regulations often did not address transactions undertaken in Eurocurrencies. The committee derives its membership from the GROUP OF TEN (read this and related legal terms for further details) countries. The committee seeks not to harmonize local banking laws but to operate within existing laws to ensure that solvency and liquidity are maintained. To this end, the committee issued the Basel Concordat (read this and related legal terms for further details) in December 1975, with the concurrence of the central banks of the Group of Ten countries.

The work of the committee is ongoing, and in 1984 the Basel Concordat was under revision.
(Main Author: William J. Miller)

Supervisory Practices in the United States

A person’s actual responsibilities and authority, rather than, for example, his or her “line” or “non-line” status, determine whether he or she is a “supervisor” for purposes of Exchange Act Sections 15(b)(4) and 15(b)(6). (John H. Gutfreund, Exchange Act Release No. 24). In this document, it was held that “even where the knowledge of supervisors is limited to ‘red flags’ or ‘suggestions’ of irregularity, they cannot discharge their supervisory obligations simply by relying on the unverified representations of employees.”

The U.S. Supreme Court in 2013 considered the question of supervisory status for purposes of Title VII of the Civil Rights Act of 1964. See Vance v. Ball State Univ., 133 S. Ct. 2434 (2013) (holding that an employee is a “supervisor” of another employee for purposes of vicarious liability under Title VII of the Civil Rights Act of 1964 only if he or she is empowered by the employer to take tangible employment actions against the other employee. Tangible employment actions include hiring, firing, failing to promote, reassigning with significantly different responsibilities, and making a decision causing a significant change in benefits). Vance does not address supervisory responsibility for purposes of the Exchange Act, and does not reflect all of the factors that are relevant to establishing such responsibility under the Exchange Act.

Resources

See Also

Bank for International Settlements