Here is the rewritten article in Markdown format:
Compliance Training Crucial for Taiwanese Banks
Taipei, Taiwan - The Financial Examination Bureau (FEB) in Taiwan has emphasized the importance of compliance training for banks operating in the country. According to the bureau’s guidelines, financial institutions must undergo regular examinations to ensure they are adhering to regulatory requirements and maintaining sound business practices.
Objectives of Financial Examinations
The FEB conducts financial examinations on domestic banks, foreign bank branches, credit cooperatives, securities companies, insurance companies, and other financial institutions. The objectives of these examinations include:
- Evaluating business activities
- Risk management
- Regulatory compliance
- Consumer protection
- Adherence to government policies
Types of On-Site Financial Examinations
The FEB conducts three types of on-site financial examinations:
- Full-scope examinations: evaluate a bank’s overall operations
- Targeted examinations: focus on specific areas of concern
- Commissioned examinations: conducted in response to supervisory concerns or changes in the financial market
Frequency of Examinations
The FEB determines examination frequencies based on a bank’s business scale, nature of activities, risk profile, impact on financial markets, and external audit work. In principle, full-scope examinations are conducted once every two years, although the frequency may be adjusted based on industry characteristics and institution-specific factors.
Differential Examination Mechanism
The FEB has implemented a differential examination mechanism to encourage banks to improve their internal oversight abilities. This system assigns different risk grades to financial institutions based on their:
- Financial soundness
- Regulatory compliance
- Consumer protection
- Risk management practices
Examinations are then tailored to the institution’s specific risk profile.
Examination Rating System
The FEB has established a rating system for domestic banks, which evaluates their:
- Financial soundness
- Regulatory compliance
- Consumer protection
- Risk management practices
The rating system assigns five grades based on the bank’s performance, with grade one being the highest.
Standardized Examination Operating Procedures
To ensure consistency in examinations, the FEB has developed standardized examination operating procedures for various types of financial institutions. These procedures outline specific areas to be reviewed and related regulations that must be complied with.
Improvement of Examination Findings
The primary purpose of financial examinations is to help banks improve their business practices. The FEB summarizes primary examination findings and annually discloses significant findings for each financial industry. Banks are required to report on improvements made in response to examination findings, which helps the bureau monitor progress and identify areas that require further attention.
Examination Communication and Training Mechanism
To enhance communication with financial institutions, the FEB holds:
- Individual case discussions during on-site examinations
- General seminars to communicate primary examination findings and important measures
- Recognizes competent training institutions that provide internal audit training programs that cover compliance requirements and regulatory updates
Overall, the FEB’s emphasis on compliance training highlights the importance of regulatory adherence in Taiwan’s financial sector. By providing banks with guidance and support, the bureau aims to promote a culture of compliance and ensure the stability and integrity of the country’s financial system.