a license has been an important prerogative of the Ministry of Finance.<sup>Thesurveyconfirmed</sup> that this practice continues in four of the countries that have adopted<sup>integrated supervision,</sup> including Iceland, Luxemburg, Mexico and Norway.'<sup>5</sup> In the countries<sup>wheretheMinistryof</sup> Finance is responsible for granting or revoking licenses, the<sup>supervisorplaysakeyrolein</sup> advising the Ministry of Finance on the moral integrity and technical<sup>expertiseof theprospective</sup> owners and managers, and in assessing the feasibility of the proposed<sup>business plansofthe</sup> prospective new financial institutions.

Interestingly, in six countries, including Australia, Canada, Latvia,<sup>Mexico,Norwayand</sup> Sweden, the integrated supervisory agency is not empowered to<sup>handle andresolveconsumers'</sup> complaints against financial institutions. In those countries, consumer<sup>protectionissuesare</sup> normally handled by judicial authorities whenever users of financial<sup>servicescannotreacha</sup> satisfactory agreement with financial institutions. In 1999, Mexico<sup>establisheda separateagency</sup> to prevent abuses by financial intermediaries and to resolve any type of<sup>consumers'claimsin the</sup> financial sector industry.'<sup>6</sup> In summary, the survey revealed that the group of unified supervisory<sup>agenciescovered in this</sup> survey is not as homogenous as it seems at first sight. On the one<sup>hand,there isa groupof single</sup> supervisors with wide regulatory and supervisory powers over the intermediaries<sup>theysupervise</sup> (Denmark, Korea, Malta, Singapore, and United Kingdom).<sup>Ontheotherhand, thereissecond</sup> group of single supervisors with limited regulatory powers (Estonia,<sup>Hungary,Iceland,Latvia,</sup> Norway and Sweden). Finally, there is a third group of partially<sup>unifiedagenciesthatonly</sup> supervise 2 of the 3 main sectors in the financial system (Australia,<sup>Canada,Luxembourgand</sup> Mexico).

As a group, the unified supervisory agencies tend to have<sup>wide powersto supervisethe financial</sup> system, but less to regulate it. In many countries, the Ministry of<sup>Financecontinuestoplay an</sup> important role in setting the key prudential rules, including risk<sup>managementandsolvency</sup> requirements. Moreover, in several countries, the approval or revocation<sup>of licensesstill remains</sup> the prerogative of the Ministry of Finance. Finally, several agencies<sup>lackthe powerstoresolve</sup> consumer protection issues.

# **III.** Harmonizing Regulatory and Supervisory Processes Across the<sup>Financial</sup> System

In countries that have adopted integrated supervision, as well<sup>asincountrieswithmultiple</sup> supervisors, a certain degree of harmonization of supervisory and<sup>regulatorypracticesbetween</sup> the banking, securities and insurance supervisors is desirable to prevent<sup>regulatoryarbitrageand</sup> make sure that similar risks are measured using consistent parameters<sup>andmethodologies,</sup> regardless of the type of financial intermediary that has undertaken them.

**15** Interestingly, Kredittilsynet of Norway has the power to approve and revoke<sup>licensesfor intermediaries</sup> in the securities market, i.e. investment firms and asset management funds,<sup>and also for insurance brokers.</sup> **16** See the National Commission to Protect and Defend the<sup>UsersofFinancialServices:</sup> www.condusef.gob.mx.

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