The Regulations of Financial Conglomerates in Five Asia Countries and Australia: A Policy Comparative Study
DOI:
https://doi.org/10.61132/ijema.v1i3.219Keywords:
Financial Conglomerate, Financial System Stability, Financial Holding Company, Financial Conglomerate RegulationAbstract
Financial conglomerates are considered to have a significant role in a country’s economy. A well-developed financial conglomerate will bring economy’s positive growth. However, when one collapses, systemic risk cannot be avoided to the financial system. The study conducts a comparative analysis of financial conglomerates/financial holding companies policies in six countries: Indonesia, South Korea, Taiwan, Malaysia, Singapore, and Australia. Furthermore, the research examines the literature review method of financial conglomerates criteria, structure, synergy, intragroup transactions, and data protection. In general, the requirements of financial conglomerates within research sample countries align with the Joint Forum. Indonesia is still developing the financial conglomerate’s minimum assets and members. Singapore is more concerned with a portion of assets, capital, liabilities, or income, while Taiwan regulates the total assets and paid-in capital. Malaysia regulates strictly with specific minimum ownership, while Australia focuses more on transaction materiality. The synergy among members of financial conglomerates may improve efficiency—however, the intragroup transactions raise systemic risk. Consumer data protection should be considered when financial conglomerates conduct cross-selling. From this study, policymakers should enhance their policies so that financial conglomerates take more advantage of generating the country’s economy while managing challenges to the financial system’s stability.
Downloads
References
Asia-Pacific Economic Cooperation. (2024). About APEC: Mission statement. https://www.apec.org/about-us/about-apec/mission-statement
Australian Prudential Regulation Authority. (2017). Supervision of conglomerate groups: Level 3. https://www.apra.gov.au/supervision-of-conglomerate-groups-level-3
Australian Prudential Regulation Authority. (2020). Discussion paper: Supervision of conglomerate groups. Australian Prudential Regulation Authority.
Bank Negara Malaysia. (2013). Financial Services Act 758. Bank Negara Malaysia.
Bank Negara Malaysia. (2014). Approach to regulating and supervising financial groups. Bank Negara Malaysia.
Bank Negara Malaysia. (2023, December 20). List of financial holding companies. www.bnm.gov.my/list-of-financial-holding-companies
Basel Committee on Banking Supervision. (2012). Principles for the supervision of financial conglomerates. Bank for International Settlements.
Government of Indonesia. (2023). Law Number 4 concerning development and strengthening of financial services. Government of Indonesia.
Government of Malaysia. (2013). Islamic Financial Services Act. Government of Malaysia.
Government of Malaysia. (2013). The Financial Services Act. Government of Malaysia.
Government of Singapore. (2013). Financial Holding Companies Act. Government of Singapore.
Government of Singapore. (2022). The Financial Holding Companies Act. Government of Singapore.
Government of South Korea. (2000). Monopoly Regulation and Fair Trade Act. Government of South Korea.
Government of Taiwan. (2001). The Financial Holding Company Act. Government of Taiwan.
Government of the United States. (1999). Financial Services Modernization (Gramm-Leach-Bliley) Act. United States of America.
International Financial Reporting Standards. (2024). Use of IFRS standards by jurisdiction. https://www.ifrs.org/use-around-the-world/use-of-ifrs-standards-by-jurisdiction/
Korean Financial Supervisory Services. (2020). Act on the supervision of financial conglomerates No. 17800. Korean Financial Supervisory Services.
Labonte, M. (2013). Systemically important or "too big to fail" financial institutions. Journal of Current Issues in Finance, Business and Economics.
Lee, H.-H. E. (2007). Comparative studies on the financial holding company laws and practices in the US and Taiwan. The University of British Columbia.
Nobes, C., & Parker, R. (2008). Comparative international accounting. Pearson Education Limited.
Otoritas Jasa Keuangan. (2014). Otoritas Jasa Keuangan Regulation Number 17/POJK.03/2014 concerning implementation of integrated risk management for financial conglomerates. Jakarta: Otoritas Jasa Keuangan.
Otoritas Jasa Keuangan. (2020). Otoritas Jasa Keuangan Regulation No. 45/POJK.03/2020 concerning financial conglomerates. Jakarta: Otoritas Jasa Keuangan.
Tripartite Group of Bank, Securities, and Insurance Regulators. (1995). The supervision of financial conglomerates. Bank for International Settlements.
Yoshino, N., Suzuki, K., Abe, K., & Kuhara, M. (2007). Financial conglomeration in East Asian regional development. Daiwa Institute of Research.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 International Journal of Economics, Management and Accounting
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.