The Financial Services Authority of Honduras is committed to providing open, transparent regulatory frameworks and requirements, which are consistent with international best practice, and to applying and enforcing these requirements sensibly and consistently in a firm but fair manner.
Underpinning our supervisory work programme is the Authority’s risk-based philosophy. This ensures that our standards are appropriately calibrated to Honduras’ wholesale and domestic financial markets and that our supervisory resources are applied to those firms which pose the greatest risk. This risk-based approach has been endorsed by a variety of international regulatory and standard setting bodies.
The Authority uses a risk-based framework to conduct its supervisory programme, which enables us to:
- Carry out the responsibilities placed on the Authority by various Acts in an effective and efficient manner
- Allocate supervisory resources to where risk is most pertinent
- Observe and adhere to international best practices while monitoring and responding to external developments, taking into consideration the nature of the Honduras market
Risk-based Supervisory Process
Using the risk-based framework allows the Authority to detect problems at an early stage and take regulatory action on a timely basis.
If an entity fails, the risk-based framework seeks to ensure that it either returns to compliance or its exit from the market is timely and efficiently managed.
The framework considers four main components when assessing risk:
- Identification of risks
- Assessment of risks
- Prioritisation and resource allocation
- Regulatory response to mitigate risks