where, improvements can be made. This initiative could take the form of a new Basel “ _Concordat_ ” or a new framework for home and host cooperation. It should consist of carrot and stick approach to align home-host information sharing incentives and, importantly, harmonize resolution with proactive supervision (Claessens, Herring and Shoenmaker 2010).

In the meantime, for each supervisory college, a pragmatic and voluntary oversight mechanism could be established, especially addressing those particular scenarios where the incentive misalignments are the most significant. The observation that many home supervisors simultaneously act as host supervisors makes a voluntary agreement to cooperate under the auspices of an oversight body more achievable. This framework would represent a significant step forward and would be evidenced by a non-binding understanding among participating supervisory authorities. Inspiration for the building blocks of this framework can be found when reviewing the EU operational guidelines for supervisory colleges.

Ideally the proposed framework could comprise the following elements:

- Oversight of the operations of supervisory colleges by an international body, such as the Basel Committee or the Financial Stability Board, including a mediation and conflict resolution framework. In particular, the home and/or the host supervisor should inform the oversight body in case of difficulties related to the conclusion of written agreements, the determination of significant entities, or the membership or structure issues. Furthermore, the agenda and general outcome of the college activities should be made available to the oversight body in its capacity as an observer to college meetings;

- No decision making authority with the oversight body, but a recommendation of good practice;

- Attendance of all meetings by an observer of the international oversight body who should also regularly liaise with host supervisors individually;

- Full disclosure of the composition and operations of supervisory colleges to the oversight body, including the information shared so that it can be assessed if this is adequate;

- Surveys on at least an annual basis on the effectiveness of the operation of the college among home and host supervisors administered by the oversight body;

- Peer reviews and thematic reviews on the adherence to the best practice and disclosure of the high level results;

- Clarification and alignment of the interactions between supervisory colleges and crisis management groups;

# **VI. Conclusion**

The global financial crisis has demonstrated significant gaps in cooperation among banking supervisors. As a primary mechanism to strengthen supervisory cooperation, the G-20 has advocated the use of supervisory colleges. Supervisory colleges were active well before and during the global financial crisis, but almost no analysis of their role and operations during the crisis can be found. Despite this, colleges have now been established and are operational for each globally systemic financial institution. Good practice principles governing their operations have also been released.

quality of the decision relies on information spread among a number of people. The idea main idea is that any solution should take into account the incentives of self-interested agents, i.e., the people on whose information the decision relies must find it in their interest to reveal that information .

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