Global Oversight: Supervising Cross-border Capital Flows & Regulatory Arbitrage Training Course

Introduction

The increasing interconnectedness of global capital markets presents significant challenges for effective supervision, particularly concerning cross-border capital flows and the prevention of regulatory arbitrage. This crucial training course is designed to equip supervisors with the specialized knowledge and strategic frameworks needed to navigate these complexities. Participants will gain a comprehensive understanding of the drivers and dynamics of cross-border capital flows, the various forms of regulatory arbitrage, and the tools and techniques for effective supervision in this globalized environment. Mastering the supervision of cross-border capital flows and regulatory arbitrage is essential for maintaining financial stability and ensuring fair market practices.

This intensive training course delves into the intricacies of monitoring and managing cross-border capital flows, including their impact on domestic financial stability and the potential for illicit financial flows. We will explore the various motivations behind regulatory arbitrage, where entities exploit differences in regulations across jurisdictions, and the risks this poses to market integrity and supervisory effectiveness. Participants will learn about international cooperation mechanisms, information sharing agreements, and best practices in designing and implementing regulations that minimize opportunities for regulatory arbitrage while effectively supervising globally active financial institutions and market participants.

Target Audience

• Central Bank Supervisors
• Financial Regulators
• International Regulatory Cooperation Specialists
• Compliance Officers
• Risk Management Professionals
• Policy Analysts
• Professionals in Financial Intelligence Units (FIUs)

Course Objectives

• Understand the drivers, dynamics, and implications of cross-border capital flows for financial stability and market integrity.
• Identify the various forms and motivations behind regulatory arbitrage in global capital markets.
• Learn about the challenges and complexities of supervising financial institutions and activities with cross-border operations.
• Explore international cooperation mechanisms and information sharing agreements for effective cross-border supervision.
• Develop strategies for designing and implementing regulations that minimize opportunities for regulatory arbitrage.
• Understand the role of home and host country supervisors in overseeing cross-border financial activities.
• Learn about the tools and techniques for monitoring and analyzing cross-border capital flows for supervisory purposes.
• Identify the risks associated with illicit financial flows and the role of supervisors in combating them.
• Explore the use of consolidated supervision and other approaches for overseeing global financial groups.
• Understand the impact of differing regulatory regimes on cross-border financial activities and potential arbitrage.
• Learn about the role of international standards and best practices in promoting consistent regulatory outcomes.
• Develop strategies for enhancing communication and coordination with foreign supervisory authorities.
• Understand the supervisory implications of technological advancements facilitating cross-border financial activities.

Duration

10 Days

Course content

Module 1: Understanding Cross-Border Capital Flows: Drivers and Dynamics

• Analyzing the macroeconomic and financial factors driving cross-border capital flows for your module.
• Exploring different types of capital flows: foreign direct investment, portfolio flows, bank flows.
• Understanding the impact of globalization and financial liberalization on capital mobility.
• Examining the role of exchange rates and interest rate differentials in capital flows.
• Identifying the potential benefits and risks associated with large cross-border capital movements.

Module 2: The Nature and Motivations Behind Regulatory Arbitrage

• Defining regulatory arbitrage and its various forms in capital markets for your module.
• Exploring the motivations for financial institutions and individuals to engage in regulatory arbitrage.
• Analyzing how differences in capital requirements, tax regimes, and disclosure standards can be exploited.
• Understanding the impact of regulatory arbitrage on market integrity and fair competition.
• Examining historical examples and case studies of significant regulatory arbitrage activities.

Module 3: Challenges of Supervising Cross-Border Financial Institutions and Activities

• Understanding the complexities of overseeing financial institutions with operations in multiple jurisdictions for your module.
• Addressing the challenges of information asymmetry and legal constraints in cross-border supervision.
• Exploring the difficulties in enforcing domestic regulations on foreign entities.
• Analyzing the potential for regulatory gaps and overlaps in cross-border supervision.
• Understanding the need for effective coordination and communication among supervisors.

Module 4: International Cooperation Mechanisms for Cross-Border Supervision

• Exploring key international bodies and forums for regulatory cooperation (e.g., FSB, IOSCO, Basel Committee) for your module.
• Understanding the role of Memoranda of Understanding (MOUs) and other information sharing agreements.
• Analyzing the principles of mutual recognition and deference in cross-border supervision.
• Examining the challenges and successes of international supervisory colleges.
• Understanding the importance of trust and reciprocity in cross-border collaboration.

Module 5: Designing Regulations to Minimize Opportunities for Regulatory Arbitrage

• Exploring principles for designing consistent and coherent regulations across jurisdictions for your module.
• Analyzing the use of minimum standards and harmonized rules to reduce arbitrage incentives.
• Understanding the importance of addressing loopholes and unintended consequences in regulations.
• Examining the role of international standards in promoting regulatory convergence.
• Considering the impact of national sovereignty and differing legal systems on regulatory harmonization.

Module 6: The Roles of Home and Host Country Supervisors

• Understanding the distinct responsibilities and coordination requirements for home and host country supervisors in cross-border supervision for your module.
• Analyzing the principles of consolidated supervision and its application to global financial groups.
• Exploring the challenges of allocating supervisory responsibilities and ensuring effective oversight.
• Understanding the importance of clear communication and information exchange between home and host authorities.
• Examining the legal and practical limitations on host country supervisory powers.

Module 7: Monitoring and Analyzing Cross-Border Capital Flows for Supervisory Purposes

• Learning about data sources and techniques for monitoring and analyzing cross-border capital flows for your module.
• Understanding the use of balance of payments statistics and other macroeconomic indicators.
• Exploring methods for tracking portfolio flows and foreign direct investment.
• Analyzing the role of financial intelligence units (FIUs) in monitoring suspicious cross-border transactions.
• Utilizing data analytics to identify potential risks associated with cross-border capital movements.

Module 8: Combating Illicit Financial Flows in Cross-Border Capital Movements

• Understanding the risks associated with money laundering, terrorist financing, and other illicit financial flows across borders for your module.
• Analyzing the role of supervisors in ensuring compliance with AML/CFT regulations in cross-border transactions.
• Exploring the use of enhanced due diligence and beneficial ownership requirements.
• Understanding the importance of international cooperation in combating illicit finance.
• Examining the role of technology and data analytics in detecting and preventing illicit flows.

Module 9: Consolidated Supervision of Global Financial Groups

• Understanding the principles and techniques of consolidated supervision for overseeing global financial institutions for your module.
• Analyzing the challenges of assessing the overall risk profile of complex, cross-border groups.
• Exploring the role of group-wide risk management and capital planning.
• Understanding the importance of effective information sharing within supervisory colleges.
• Examining the application of resolution planning for global systemically important financial institutions (G-SIFIs).

Module 10: Impact of Differing Regulatory Regimes on Cross-Border Activities

• Analyzing how variations in regulatory requirements across jurisdictions can influence firms' decisions on where to operate and book transactions for your module.
• Understanding the potential for regulatory arbitrage arising from these differences.
• Exploring the challenges for supervisors in overseeing activities that migrate to less regulated jurisdictions.
• Examining the impact of tax havens and offshore financial centers on cross-border supervision.
• Considering the implications of regulatory competition among jurisdictions.

Module 11: Promoting Consistent Regulatory Outcomes Through International Standards

• Understanding the role of international standard-setting bodies (e.g., Basel Committee, IOSCO) in promoting consistent regulatory outcomes for your module.
• Analyzing the process of developing and implementing global regulatory standards.
• Exploring the challenges of achieving universal adoption and consistent application of these standards.
• Understanding the importance of peer reviews and compliance assessments.
• Examining the impact of international standards on reducing opportunities for regulatory arbitrage.

Module 12: Enhancing Communication and Coordination with Foreign Supervisory Authorities

• Developing strategies for improving communication and coordination with supervisory counterparts in other jurisdictions for your module.
• Understanding the importance of establishing clear channels of communication and points of contact.
• Exploring best practices for information sharing and mutual assistance in supervisory matters.
• Analyzing the role of joint supervisory teams and cross-border on-site inspections.
• Building trust and fostering strong working relationships with foreign counterparts.

Module 13: Supervisory Implications of Technological Advancements in Cross-Border Finance

• Understanding how FinTech innovations and digitalization are facilitating cross-border financial activities for your module.
• Analyzing the supervisory challenges posed by cross-border payment systems, digital currencies, and online trading platforms.
• Exploring the regulatory implications of decentralized finance (DeFi) and its cross-border nature.
• Understanding the need for adaptive supervisory approaches to keep pace with technological change.
• Examining the potential for technology to enhance cross-border supervisory cooperation.

Module 14: Case Studies in Cross-Border Capital Flows and Regulatory Arbitrage

• Analyzing real-world examples of significant cross-border capital flow events and instances of regulatory arbitrage for your module.
• Examining the supervisory responses and the lessons learned from these cases.
• Understanding the impact of these events on financial stability and market integrity.
• Discussing the effectiveness of different supervisory approaches in addressing cross-border challenges.
• Fostering interactive discussions and knowledge sharing based on practical examples.

Module 15: Developing a Strategy for Supervising Cross-Border Capital Flows and Regulatory Arbitrage

• Guiding participants in developing a comprehensive strategy for supervising cross-border capital flows and mitigating regulatory arbitrage risks within their respective jurisdictions for your module.
• Defining key objectives and priorities for cross-border supervision.
• Assessing the necessary resources and international cooperation frameworks.
• Developing a roadmap for implementing effective monitoring, information sharing, and regulatory coordination mechanisms.
• Planning for continuous improvement and adaptation to the evolving global financial landscape.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.