The Role of the Monetary and Credit Council in Regulating the Banking Sector: The Banking Committee as a Model

Abstract

This study aims to analyze the role of the Monetary and Loan Council and the Banking Committee in regulating and supervising the banking sector, with a focus on the effectiveness of regulatory policies in achieving financial stability, especially during times of crisis. It also highlights the regulatory tools employed by the council and the committee, such as on-site inspections, financial stress tests, and setting banking compliance standards.

By analyzing various experiences and conducting a comparative study of the roles of banking committees in different countries, the study finds that effective banking supervision plays a crucial role in preventing financial crises and reducing risks associated with the banking system. However, regulatory authorities face several challenges, including the rapid development of digital banking services, the need to update regulations, and enhancing international cooperation to oversee cross-border financial activities.

The study demonstrates that the success of regulatory interventions depends on the flexibility of policies, the speed of crisis response, and the balance between imposing restrictions and supporting financial innovation. It also emphasizes that developing more intelligent supervisory systems, such as utilizing artificial intelligence and big data analysis, can improve the ability to predict and mitigate banking risks before they occur.

Based on the findings, the study recommends strengthening banking transparency, imposing stricter penalties on non-compliant banks, and increasing investment in financial technology to support supervisory operations. It also calls for enhanced cooperation between local and international regulatory bodies to ensure a more stable financial system capable of addressing future challenges.