responsibilities of the unified supervisor, the ministry of finance and the central bank, so that market participants understand the scope of responsibilities and accountability of the new supervisor.

Another important issue is that the integration of supervisory agencies preferably should be undertaken when the financial system is stable, allowing management more scope to adequately address the many complex issues associated with organizational change. Trying to make organizational changes at a time when the financial sector is also experiencing difficulty (and management time needs to be directed to the basic supervisory tasks) should be avoided if possible.

# **V Conclusions**

This paper summarizes the results of a survey carried out in a group of 15 developed and developing countries that have decided to merge some of or all of their agencies responsible for supervising banks, securities finns, insurance companies, and other types of financial intermediaries. The survey analyzed the reasons for adopting integrated supervision in these countries and examined some of the key characteristics of these agencies. It also assessed the progress of these agencies in adopting a consistent framework of regulation and supervision for all financial intermediaries they oversee. In addition, the survey identified some of the practical problems that countries have faced in establishing a unified supervisory agency.

The survey led to five interesting findings. First, the need to supervise financial conglomerates effectively and on a consistent basis, along with the need to maximize economies of scale and scope, appeared as the two key reasons for adopting integrated supervision in most countries.

Second, a careful analysis of the regulatory and supervisory powers of the integrated agencies revealed that this group of agencies is not as homogeneous as it seems. On the one hand, there is a group of mega-supervisors with wide regulatory and supervisory powers over practically all intermediaries. On the other hand, there is second group of single supervisors with limited regulatory powers over the intermediaries they oversee. Finally, there is a third group of partially unified agencies that only supervise 2 of the 3 main sectors in the financial system.

The survey also revealed that in many countries, the ministries of finance and central banks continue playing a key role in issuing and amending relevant prudential regulations, authorizing or revoking licenses to financial intermediaries, and setting other important rules for the entire financial system.

Third, according to the survey only few countries have been able to design a single supervisory framework to harmonize regulations and supervisory approaches across the entire financial system. In most countries, progress towards the harmonization of prudential regulation and supervision across their intermediaries remains limited. On the one hand, most of the new integrated agencies are relatively new institutions which did not participate in the design of existing legislation. They will require more time to harmonize their regulatory and supervisory standards. On the other hand, the lack of harmonized regulatory standards for banks, insurance 31