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Compliance Function at banks

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"The four measures most frequently required or recommended by jurisdictions to promote
the independence of the compliance function are:
? the appropriate seniority of the head of compliance
? the specialisation of the compliance function (or at least the prevention of conflicts of
interests)
? a formal organisational status
? free, unencumbered access to any member of staff or document."
Extract from Implementation of the Compliance Principles, Basel Committee on Banking Supervision
- August 2008
With reference to a financial services organisation with which you are familiar, consider the
approach referred to in the extract above. Prepare a paper for Board Members setting out
your recommendations for adoption of these measures.
In your answer, you should state clearly why you believe these to be appropriate
measures to be adopted by the organisation and include specific consideration of and
comment upon how this approach could assist the organisation during the turbulent
economic environment of recent times.

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This guide will assist you in the writing of your paper. All requirements of the post have been met and researched. I am the original author of the attached. This guide will expand your knowledge and help you better understand the subject matter at hand.

I am using the American Banking System, and focusing on Citibank, a leader but a leader that has recently had some troubles.

Dear Board Members:

Over the past two years Citibank's stock has fell, the company has faced bankruptcy and overall lending has decreased. Banks make money when they are able to lend. When lending slows down or ceases, the flow of interest payments also decrease. The company needs to redefine its practices to avoid failure and meet all compliance regulations set forth.

The Good Practices of Managing Compliance Risk

In reviewing our banking relations nationally and abroad, the firm must manage compliance risk stringently. The issues with compliance are that some are looking at the regulations and stating we are in compliance and we are not. We must create a government relations position to only work on compliance risk. By having one division to oversee all of the compliance laws and risks involved with non-compliance, the bank can alleviate the burden of failure by having one division specifically for this purpose. This will streamline the process and when a process is streamlined, it can be successful.

The company must support this division as it will be a watchdog but one that will protect the company, its investors and all stakeholders. We must strive to comply, as the stronger we remain, the stronger we can help the economy be.

Areas

To fully maintain good practice compliance risk factors, the division will oversee six areas that will all be of importance. Each division will report to the Compliance Director who will have the final say in relation to all compliance breaches and ...

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