1. ulatory Reform
Presentation to the INTOSAI Committee on Knowledge Sharing and Knowledge Services
Bali, Indonesia
August 23-25, 2017 1

2. Presentation Overview
Background on the Working Group
Year in Review
Key Accomplishments
Fourth Annual Meeting
Future Priorities
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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3. Working Group Membership
Background
Working Group Membership
(as of August 2017)
The Working Group has members from 26 SAIs:
Austria
Germany
Poland
Brazil
Hungary
Russia
Canada
Indonesia
Saudi Arabia
Chile
Italy
Spain
China
Republic of Korea
Sweden
Cyprus
Mexico
United Kingdom
Estonia
Morocco
United States
Finland
Netherlands
European Court of Auditors
France
Pakistan
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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4. Background (cont.) Subgroups
Subgroup One: Exchange information about audit methodologies and experiences Led by China National Audit Office
Subgroup Two: Outreach to international financial bodies Led by Office of the Auditor General of Canada
Subgroup Three: Review and analyze international reform efforts and potential emerging risks Led by U.S. Government Accountability Office
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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5. Year in Review Key Accomplishments
Produced and delivered annual report in December 2016 to the INTOSAI Governing Board that, among other things, examined
Progress made by international organizations and their member countries in implementing the G20’s financial regulatory reforms in response to the financial crisis and
Risks and challenges to financial stability at the global and national levels
Expanded membership to SAIs of Germany and Pakistan
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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6. Year in Review Key Accomplishments
Strengthened working relationships with the International Monetary Fund (IMF), the Financial Stability Board (FSB), and the Basel Committee on Banking Supervision (Basel Committee)
Met separately with FSB and the Basel Committee at their headquarters to further educate them about INTOSAI and discuss information-sharing opportunities
Had IMF, FSB, and Basel Committee deliver presentations about their activities at Working Group’s 4th annual meeting
Developed and conducted a training workshop for SAIs on the use of criteria for financial sector audits to enhance their knowledge, skills, and abilities
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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7. Part I. Full Working Group Member Presentations and Discussions
Fourth Annual Meeting
Part I. Full Working Group Member Presentations and Discussions
SAIs presented information about their recent financial regulatory audits:
Austria Court of Auditors—Audit on the Austria Banking Supervision
European Court of Auditors (ECA)—Audit on the Single Supervisory Mechanism (SSM)
Germany—Parallel Audit of Banking Supervision Post-SSM
Netherlands Court of Auditors—Experiences with Parallel Audits
China National Audit Office—Recent Developments of China’s Financial System Audits
GAO—Audit on Federal Reserve Stress Tests
Discussed first steps for updating Terms of Reference in 2018
Announced that the 2018 annual meeting will be held in China
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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8. Part II. Subgroup Discussions - Key Topics
Fourth Annual Meeting (cont.)
Part II. Subgroup Discussions - Key Topics
Subgroup 1: Exchanging audit experiences
Challenges facing SAIs in conducting financial regulatory audits, such as SAIs’ limited mandates and difficulty recruiting skilled staff
Subgroup 2: Outreach to international financial bodies
Ways to enhance relationships and share information with the Basel Committee, FSB, and IMF and establish relationships with other international organizations
Subgroup 3: Monitor financial system reforms, emerging risks
Assessing impact and effectiveness of international financial regulatory reforms
Approaches to monitoring emerging financial stability risks, including through parallel audits
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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9. Part III. Insights from Outside Experts
Fourth Annual Meeting (cont.)
Part III. Insights from Outside Experts
Nigel Jenkinson discussed IMF’s methodology for conducting Financial Sector Assessment Program (FSAP) assessments
Xavier-Yves Zanota discussed the Basel Committee’s mandate for setting international standards for the prudential regulation of banks
Tara Rice discussed FSB’s policy evaluation framework, including tools and data, for evaluating benefits, costs, and effects of regulatory reforms
Donald Kohn, Brookings Institution, and Thaya Brook Knight, Cato Institute, discussed changes in the financial markets and their potential public policy implications
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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10. Future Priorities Working Group Focus 2017-2018
Update Terms of Reference, focusing on developing and implementing new work streams to achieve objectives
Increase information sharing or collaboration between the Working Group and the Basel Committee, FSB, and IMF and establish working relationships with other international standard setting organizations
Investigate effects of international financial reforms in individual countries (e.g., costs and benefits)
Continue to develop methodology for assessing emerging risks to financial stability
Continue to explore ways to incorporate the U.N.’s Sustainable Development Goals into Working Group activities
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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11. Questions and discussion
Conclusion
Questions and discussion
INTOSAI Working Group on Financial Modernization and Regulatory Reform
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