6 Bank Examiner Interview Questions and Answers

Introduction

This question assesses your attention to detail and understanding of compliance regulations, which are crucial for a Junior Bank Examiner role.

How to answer

• Use the STAR method to structure your response
• Clearly state the compliance issue you identified
• Explain the steps you took to investigate and document the issue
• Discuss how you communicated your findings to the relevant stakeholders
• Highlight the impact of your discovery on the bank's compliance practices

What not to say

• Failing to provide specific examples or details about the situation
• Blaming others for the compliance issue without taking responsibility for your findings
• Overlooking the importance of documentation and communication in your process
• Focusing solely on the issue without discussing the follow-up actions or outcomes

Example answer

“During an internship at a local bank, I identified a discrepancy in the loan documentation process that violated compliance regulations. I thoroughly reviewed the records and documented my findings, then presented them to my supervisor. This led to a team meeting where we updated our documentation procedures, resulting in a 30% improvement in compliance accuracy. This experience taught me the importance of vigilance and clear communication in maintaining compliance.”

Introduction

This question evaluates your understanding of risk management and your analytical approach to assessing potential issues in banking products.

How to answer

• Outline a clear methodology for conducting a risk assessment
• Discuss the factors you would consider, such as market risk, credit risk, and operational risk
• Explain how you would gather and analyze relevant data
• Describe how you would communicate your findings and any potential risks to stakeholders
• Mention any regulatory frameworks or guidelines that you would follow

What not to say

• Suggesting a lack of planning or a haphazard approach to risk assessment
• Ignoring the importance of data analysis and stakeholder communication
• Overlooking specific types of risks relevant to banking products
• Failing to reference any regulatory standards or compliance requirements

Example answer

“To conduct a risk assessment for a new savings product, I would start by identifying potential risks associated with the product, such as interest rate risk and liquidity risk. I would analyze market trends and customer feedback, as well as review similar products from competitors. After gathering data, I would evaluate the risks and present my findings to the product development team, ensuring we comply with all regulatory guidelines. This structured approach helps ensure that all potential risks are thoroughly considered before launch.”

Introduction

This question assesses your attention to detail and ability to identify compliance risks, which are critical skills for a Bank Examiner.

How to answer

• Use the STAR method to clearly outline the Situation, Task, Action, and Result
• Explain the context of the examination and the compliance issue discovered
• Detail the steps you took to investigate and substantiate your findings
• Discuss how you communicated the issue to the bank management and what actions were taken
• Highlight the outcomes of your actions, including any improvements made by the bank

What not to say

• Failing to provide a specific example or vague responses
• Downplaying the significance of the compliance issue
• Not discussing your role in the resolution process
• Avoiding mention of collaboration with other departments or agencies

Example answer

“During an examination at a regional bank, I uncovered a significant discrepancy in their loan underwriting procedures, which violated compliance regulations. I documented my findings thoroughly and presented them to the bank's management. My investigation led to a comprehensive review of their processes and the implementation of new training for staff. As a result, the bank improved its compliance rating by 20% in the following audit.”

Introduction

This question evaluates your commitment to professional development and understanding of regulatory changes, which is essential for a Bank Examiner.

How to answer

• Mention specific resources you utilize, such as regulatory bodies, professional associations, or online courses
• Describe any relevant conferences, workshops, or seminars you attend
• Discuss how you apply new knowledge to your job and share it with your team
• Highlight any certifications or training that enhance your expertise in banking regulations
• Explain your proactive approach to staying informed in a constantly changing regulatory environment

What not to say

• Claiming that you rely solely on your current knowledge without seeking updates
• Not mentioning any specific resources or activities
• Suggesting that regulations are not significant to your role
• Failing to demonstrate a proactive attitude towards learning

Example answer

“I regularly follow updates from the European Banking Authority and participate in webinars hosted by the Italian Banking Association. Additionally, I am a member of a professional network where we discuss emerging regulatory trends. This continuous learning ensures that I can apply the latest compliance standards effectively during examinations.”

Introduction

Senior bank examiners must be able to design and execute focused examinations that identify root causes of deterioration in asset quality, assess provisioning adequacy under French and EU rules, and determine supervisory actions. This is a core technical responsibility, especially given ACPR/ECB coordination in France.

How to answer

• Start with scoping: explain how you'd define objectives (e.g., validate NPL classification, provisioning, concentration risks) and timeline.
• Describe data collection: request loan tapes, credit approval files, watchlist reports, collateral valuations, IFRS 9 models (or local GAAP adjustments), and management reports.
• Detail analytical procedures: perform stratified sampling by exposure type/industry/borrower size, calculate vintage and roll‑rate metrics, and benchmark PD/LGD assumptions against peers and macroeconomic scenarios.
• Explain model and governance review: evaluate IFRS 9 expected credit loss model assumptions, validation backtests, allowance governance, and credit risk appetite alignment.
• Assess control environment: review underwriting standards, forbearance policies, early warning systems, and workout/collection processes.
• Integrate regulatory context: reference applicable ACPR guidance, ECB expectations (if significant institution), and Basel principles for credit risk and provisioning.
• Conclude with findings and supervisory response: prioritize issues, quantify provisioning shortfalls if any, recommend remediation steps, timeframes, and possible Pillar 2 or supervisory measures.
• Mention stakeholder communication: how you'd brief bank management, prepare the examination report, and coordinate with ACPR/ECB colleagues as needed.

What not to say

• Saying you'd rely only on high‑level reports without sampling loan files or verifying documentation.
• Ignoring IFRS 9 or local provisioning rules and not tying your assessment to regulatory expectations.
• Focusing only on quantitative metrics without assessing governance and controls.
• Claiming you'd immediately recommend severe enforcement without first engaging the bank on remediation options.

Example answer

“I would begin by scoping the exam to assess whether the rise in NPLs reflects portfolio deterioration, model issues, or classification changes. I'd request a complete loan tape plus credit files for a stratified sample across sectors and vintages, run roll‑rate and vintage analyses, and backtest the bank's IFRS 9 staging and ECL calculations. Simultaneously I'd review underwriting changes, forbearance policies, and provisioning governance. If I found under‑provisioning driven by optimistic LGD assumptions and weak collateral valuation controls, I'd quantify the shortfall, require immediate model recalibration and strengthened collateral valuation practices, set remediation milestones, and coordinate the findings with ACPR and, where applicable, ECB supervisory colleagues.”

Introduction

Anti‑money laundering and KYC supervision is a key supervisory priority in France and the EU. Examiners must balance prompt risk mitigation, proportional supervisory measures, and coordination with AML authorities (e.g., TRACFIN, ACPR), while ensuring the bank remediates effectively.

How to answer

• Explain immediate risk mitigation: describe any immediate recommendations (e.g., transaction monitoring holds, strengthened enhanced due diligence on high‑risk clients) to reduce near‑term exposure.
• Describe escalation protocol: outline how you'd document findings, escalate internally to supervisory managers, and notify relevant authorities (TRACFIN/ACPR) when required.
• Detail remediation planning: propose a clear remediation plan with prioritized actions, responsible owners, milestones, and independent testing requirements.
• Discuss governance and resourcing: recommend changes in governance, training, and resource allocation to AML/Compliance functions.
• Include monitoring and closure criteria: define how you'll monitor progress (periodic follow‑ups, independent reviews) and what objective criteria will determine closure.
• Address stakeholder communication and proportionality: explain how you'd communicate with bank management and board, applying proportional supervisory measures (warnings, fines, restrictions) if remediation is inadequate.
• Mention regulatory coordination: specify when you'd involve ACPR, TRACFIN, and possibly law enforcement, and how to document those communications.

What not to say

• Saying you'd simply issue a report and wait for the bank to fix things without follow‑up.
• Recommending immediate punitive measures without giving the bank a chance to remediate or without coordinating with authorities.
• Failing to mention regulatory reporting obligations (TRACFIN) or ACPR escalation channels in France.
• Overlooking the need for independent testing of remediation effectiveness.

Example answer

“My immediate priority would be to contain risk: recommend temporary restrictions on onboarding new high‑risk clients and enhanced transaction monitoring for affected accounts. I would document exceptions and escalate to my supervisory manager and the ACPR as appropriate; if there are suspicious activities, we'd notify TRACFIN. Next, I'd require the bank to present a time‑bound remediation plan with clear owners, strengthened KYC policies, staff training, and independent testing. I'd schedule regular follow‑ups and demand an external validation of remediation within an agreed timeframe. If progress is insufficient, I'd consider proportionate supervisory measures (formal recommendations, fines, or operational restrictions) in coordination with ACPR and legal counsel.”

Introduction

Senior examiners must lead diverse teams, resolve technical disagreements objectively, and maintain an evidence‑based, consistent supervisory stance. This behavioral question evaluates leadership, communication, and decision‑making under pressure.

How to answer

• Use the STAR method: briefly set the situation, task, action, and result.
• Clarify the situation: describe the disagreement's nature (e.g., differing views on provisioning adequacy or control weakness severity).
• Explain facilitation steps: show how you gathered the evidence, asked each analyst to present data and rationale, and kept the discussion focused and professional.
• Describe objective criteria: mention using regulatory guidance, quantitative analysis, benchmark data, or peer reviews to arbitrate.
• Detail your decision and rationale: explain how you made the final call—consensus, majority, or as lead examiner—and how you documented it.
• Highlight follow‑up and learning: note how you communicated the decision to stakeholders and any process changes you implemented to avoid repeat conflicts.

What not to say

• Claiming you ignored dissenting opinions or forced a decision without evidence.
• Saying you deferred to hierarchy without assessing technical merits.
• Focusing only on interpersonal aspects and not on objective resolution methods.
• Failing to describe measurable outcomes or lessons learned.

Example answer

“In a prior role at a regional supervisory unit, my team disagreed on whether a bank's provisioning shortfall warranted a formal supervisory recommendation. I convened a focused meeting where each analyst presented their evidence—model backtests, loan file reviews, and vintage analyses. I asked clarifying questions and then applied ACPR/ECB benchmarks and IFRS 9 validation outcomes as objective criteria. We agreed on a middle path: require immediate model recalibration and enhanced provisioning within a set timeline, combined with an independent validation. I documented the decision, briefed my manager, and later updated our internal exam guidance to require a standardized evidence checklist for similar disputes. The bank completed remediation on schedule and our approach improved team alignment in subsequent exams.”

Introduction

Lead Bank Examiners must detect material weaknesses in compliance, risk management or capital adequacy quickly and drive appropriate supervisory responses. This question assesses your technical judgement, investigative approach and ability to escalate findings while working with institutions and regulators in France (e.g., Banque de France, ACPR).

How to answer

• Use the STAR (Situation, Task, Action, Result) format to structure your response.
• Start by succinctly describing the bank context (size, business lines, and regulatory environment in France/ECB scope).
• Explain the specific indicator or evidence that led you to suspect an issue (e.g., ICAAP shortfall, liquidity metric breaches, AML red flags, documentation gaps).
• Detail the examination techniques you used (data analysis, sampling, interviews with senior management, model validation, review of policies).
• Describe how you assessed materiality and risk to the bank and to financial stability, referencing relevant French/European regulations where appropriate (CRD/CRR, LCB-FT).
• Explain how you communicated findings internally (to your supervisory manager/ACPR) and externally to bank management, including proposed remedial actions and timelines.
• Quantify the outcome where possible (e.g., capital ratio improved, remediation plan implemented, sanctions avoided or imposed) and note lessons learned and how you improved future examinations.

What not to say

• Focusing only on technical details without describing escalation or remediation steps.
• Claiming you solved the issue single-handedly without acknowledging team and stakeholder roles.
• Omitting how you assessed materiality or justification for supervisory actions.
• Using vague statements like "I found problems and fixed them" without evidence or measurable outcomes.

Example answer

“While leading an on-site exam of a mid-sized French bank with significant corporate lending, I noticed inconsistencies between reported RWA calculations and underlying loan-level data. After targeted sampling and model review, we identified weaknesses in LGD assumptions and inadequate documentation for borrower collateral valuation. I escalated the concern to my ACPR contact, convened a technical working group including credit risk and model validation specialists, and held a formal findings meeting with the bank's CRO and CFO. We required a corrective action plan: recalibrating LGD parameters, strengthening documentation controls, and a temporary capital add-on until corrected. Over six months the bank implemented changes; CET1 ratios improved to regulatory expectations and the bank enhanced its model governance. The case reinforced the need for early cross-functional involvement and clearer documentation requests during on-site work.”

Introduction

Lead Examiners must manage teams, maintain supervisory independence, and negotiate remedial actions even when banks push back. This evaluates leadership, conflict management, negotiation and the ability to protect financial stability while preserving constructive dialogue with institutions such as BNP Paribas or Crédit Agricole.

How to answer

• Set the scene: describe the team composition (credit, market, compliance specialists) and why the inspection was sensitive (high-profile client, M&A activity, reputational risks).
• Explain how you established clear objectives, scope and roles at the outset to ensure team alignment.
• Describe your approach to evidence-gathering to build an objective, auditable record (meeting minutes, data extracts, independent validations).
• Explain tactics used to manage resistance from senior management—maintaining professional tone, presenting facts, offering proportional remediation options, and using regulatory levers if necessary.
• Discuss how you supported and motivated the team through the pressure (coaching, conflict resolution, ensuring safety to raise concerns).
• Conclude with the outcome: whether recommendations were accepted, how compromises were documented, and how you preserved supervisory credibility and relationships.

What not to say

• Saying you "gave in" to management without documenting why, or that you ignored team concerns to appease stakeholders.
• Claiming authoritarian leadership without collaborative or evidence-based approaches.
• Failing to mention regulatory escalation options (e.g., formal enforcement, reporting to ACPR/ECB) if constructive dialogue fails.
• Neglecting team well-being or omitting how you ensured work product quality under stress.

Example answer

“I led a cross-disciplinary team examining a regional bank undergoing a strategic acquisition. Senior management minimized control gaps we found in post-trade reconciliation. I began by ensuring the team produced a clear, evidence-based dossier: reconciliations, exception reports, and process maps. I organized a series of structured meetings with the bank's COO and risk committee where we presented findings, demonstrated potential run-rate losses and operational risk exposure, and proposed tiered remediation options. When management resisted immediate fixes citing cost, I explained the supervisory expectations under ACPR guidance and the potential for formal measures if risks persisted. Internally, I kept the team focused by delegating ownership of deliverables, providing support on stakeholder calls, and escalating contentious points promptly. The bank agreed to a time-bound remediation plan with independent validation and regular reporting to us. The approach preserved a constructive relationship while ensuring risks were addressed.”

Introduction

This situational question tests your judgment under time pressure, ability to prioritize supervisory steps, and knowledge of proportionate measures to protect consumers and system stability in the French/European regulatory framework.

How to answer

• Start by outlining short-term priorities: protect depositors, assess risk build-up, and verify the integrity of reported data.
• List immediate data and analysis steps: request granular loan-level data, concentration and vintage analysis, underwriting documentation, and stress tests on credit losses.
• Describe on-site vs off-site decision criteria: when to dispatch a rapid on-site review versus enhanced off-site monitoring.
• Explain communication steps with the bank (information requests, meetings) and with domestic/regional authorities (ACPR, Banque de France, ECB if relevant).
• Propose supervisory actions proportionate to findings: additional capital buffers, restrictions on dividend/distribution, limits on further lending, remediation requirements for underwriting, or formal supervisory measures if necessary.
• Mention consumer protection considerations (vulnerable borrowers), AML checks if product misuse suspected, and timelines for follow-up and reporting.
• Conclude with monitoring and escalation plan: metrics to track, reporting cadence, and triggers for enforcement.

What not to say

• Taking immediate punitive action without first gathering evidence and assessing materiality.
• Ignoring consumer protection or AML concerns when underwriting standards change rapidly.
• Failing to coordinate with relevant French or EU authorities in cross-border or systemic cases.
• Providing overly generic steps without concrete data requests or monitoring metrics.

Example answer

“My immediate priority would be to determine whether the growth is driven by a genuine business opportunity or by lax underwriting and risk transfer. I would issue an urgent data request asking for loan-level files, underwriting criteria, vintage performance, approval workflows, and related party information. Simultaneously, I'd run concentration and stress analyses to estimate potential losses and call an early meeting with the bank's CEO and head of retail to discuss governance and controls. If off-site analysis raised red flags—e.g., rapid increases in LTVs or deterioration in documentation—I would deploy a targeted on-site team to validate underwriting and controls. Supervisory measures could include requiring a remediation plan, imposing limits on new high-risk originations, and asking for additional capital or liquidity buffers until the bank demonstrates improved controls. I would notify ACPR and, if cross-border implications exist, coordinate with the ECB. Monitoring would include weekly reporting of new originations and monthly vintage performance until risk is mitigated.”

Introduction

Principal Bank Examiners must lead large, often cross-functional examination teams and navigate jurisdictional, legal and cultural differences while preserving examination quality and regulatory objectives. This question assesses leadership, coordination, and supervisory judgement in complex engagements.

How to answer

• Use the STAR (Situation, Task, Action, Result) structure so the story is clear and evidence-based.
• Start by explaining the scope: which bank (e.g., a Canadian bank with foreign branches), jurisdictions involved, regulatory triggers, and business lines examined.
• Describe your role as principal examiner: team size, disciplines represented (credit, market, liquidity, IT, AML), and stakeholders (OSFI, host supervisors, bank senior management).
• Explain how you planned and divided work: risk-based scoping, allocation of subject-matter experts, timelines, and coordination points.
• Detail how you handled cross-border issues: information-sharing protocols, dealing with differing supervisory expectations, legal/consent constraints, and escalation paths.
• Give examples of communication practices you used to keep quality and timelines on track (regular checkpoints, joint calls, shared documentation standards).
• Quantify outcomes where possible: findings issued, remediation timelines achieved, reductions in supervisory concern, or enhancements to the bank’s governance.
• Close with lessons learned about leadership, stakeholder management, and improvements you implemented for future exams.

What not to say

• Focusing only on administrative details (schedules, meetings) without demonstrating supervisory judgement or technical depth.
• Claiming sole credit and not acknowledging team members or host supervisors.
• Omitting mention of regulatory constraints or legal processes when discussing cross-border coordination.
• Failing to describe measurable outcomes or concrete improvements that resulted from the examination.

Example answer

“At OSFI, I led a nine-person team to examine a Canadian Schedule I bank with significant operations in the UK and Caribbean following concerns about credit underwriting and AML controls. I scoped the exam to focus on commercial credit portfolios, correspondent banking, and AML transaction monitoring. I assigned credit-model validation and AML specialists, set a two-week cadence for internal checkpoints, and established an information-sharing protocol with the UK PRA under our memorandum of understanding. We encountered differing expectations on sampling approaches; I convened a trilateral meeting with host supervisors and the bank to agree on a common sample and evidence list. The team identified weaknesses in syndicated loan documentation and gaps in AML alert tuning. We issued a focused supervisory letter with remediation milestones; the bank completed 70% of remediation within six months and strengthened its AML tuning, which reduced false positives by an estimated 30%. The engagement reinforced the value of early alignment with host supervisors and clear delegation of technical tasks.”

Introduction

Principal examiners must evaluate credit risk frameworks and the governance around models that materially affect provisioning (IFRS 9) and regulatory capital (Basel). This tests technical depth in model validation, risk governance, and regulatory interpretation.

How to answer

• Outline a structured approach: coverage of policy, governance, model development lifecycle, validation, back-testing, and use in decision-making and capital/provisioning.
• Describe key documentation and evidence you would request: model methodology, data inputs, validation reports, back-testing results, override statistics, and model change logs.
• Discuss governance: roles of the model owner, model risk management function, independent validation, model risk committee, and escalation.
• Explain technical checks: data sufficiency and quality, model assumptions, segmentation, calibration, performance metrics (AUC, KS), stability over time, and stress testing.
• Cover IFRS 9-specific considerations: forward-looking information, staging criteria, macroeconomic scenarios, and overlay governance.
• Address interaction with Basel requirements: capital adequacy impact, potential model conservatism vs. procyclicality, and supervisory add-ons.
• Mention red flags: insufficient validation, high override rates, opaque data lineage, weak challenge from independent validators, and lack of management action plans.
• Recommend supervisory actions proportionate to risk: requirements for model remediation, restrictions on model use, or capital/staging adjustments.

What not to say

• Answering only at a high level without concrete validation tests or metrics.
• Confusing accounting (IFRS 9 provisioning) with regulatory capital rules or failing to discuss how they interact.
• Over-relying on vendor/model output without checking data quality and model assumptions.
• Neglecting governance and challenge functions; focusing solely on technical model performance.

Example answer

“I would start by reviewing the bank’s credit risk policy and the model inventory to identify which PD/LGD models feed provisioning and capital. I’d request model documentation, development datasets, validation reports, and any independent model reviews. Key validation steps would include checking data lineage and quality, assessing segmentation logic, testing predictive performance (AUC/KS) and stability, reviewing calibration and back-testing results, and evaluating how macroeconomic scenarios are incorporated for IFRS 9 staging and ECL calculation. I’d assess governance by reviewing the model risk policy, minutes from the model risk committee, independence of validators, and frequency of model updates. Red flags include frequent management overrides, lack of scenario analysis for IFRS 9, and insufficient independent challenge. Depending on findings, supervisory actions could range from requiring remediation plans and enhanced validation to restricting models’ use for provisioning or imposing conservatism add-ons to ensure capital adequacy. For example, in a prior review of a Canadian bank, we required a remediation plan when forward-looking adjustments were not documented and the independent validator was part of the model development reporting line; after remediation, transparency and governance improved and provisioning became more consistent with observed losses.”

Introduction

Examiners often face pressure from banks' senior management or political stakeholders. Principal examiners must balance firmness in enforcement with clear communication and proportionality. This question probes judgment, stakeholder management, and ethical conduct.

How to answer

• Briefly set the context: acknowledge the need to protect the public interest while maintaining professional relationships.
• Describe immediate steps: ensure findings are evidence-based, documented, and reviewed internally (peer review/quality assurance) before engagement.
• Explain communication strategy: present findings calmly, show the evidence and impact, and provide a clear rationale for required actions and timelines.
• Address escalation: involve your supervisor, legal, or policy colleagues early; if appropriate, propose a remediation plan with milestones to give the bank a constructive path.
• Discuss how to handle political pressure: remain transparent about the supervisory mandate, follow established escalation protocols, and document all interactions.
• Emphasize proportionality and collaboration: offer technical assistance where appropriate, but be clear on non-negotiable safety-and-soundness issues.
• Conclude by describing how you would follow up: monitor remediation, update stakeholders, and reflect lessons learned to improve future engagement.

What not to say

• Saying you would back down to avoid conflict or political consequences.
• Admitting you would skip internal review steps or bypass documentation.
• Suggesting adversarial tactics without aiming for remediation or constructive outcomes.
• Overstating authority or promising outcomes outside your supervisory mandate.

Example answer

“First, I would ensure the finding is rock-solid: verify the evidence, confirm legal/regulatory basis, and run the write-up through our internal quality-assurance and my supervisor. When meeting senior management, I would calmly present the evidence, explain the prudential risks and why remediation matters for depositors and market confidence, and propose a pragmatic remediation plan with concrete milestones and resource expectations. I would document the discussion and copy appropriate internal stakeholders (legal, regional supervisors). If management threatened political escalation, I would escalate internally—informing my director and the Office of the Superintendent—so they could coordinate policy or ministerial engagement if necessary. Throughout, I would remain professional and offer assistance (e.g., clarifying expectations or suggesting control improvements) while being clear that certain corrective actions are required. This approach preserves regulatory integrity, reduces unnecessary confrontation, and creates a path for the bank to address issues promptly.”

Introduction

Supervisory bank examiners must design focused, efficient examinations that identify risks and test controls. For a supervisory role in South Africa, this also involves understanding local regulations (SARB, FSCA expectations), Basel standards, and the practical operations of banks like Standard Bank, Absa, Nedbank or FNB.

How to answer

• Open with a high-level framework you would use (e.g., risk-based supervision): how you assess inherent risk, control environment, and impact.
• Describe preparation steps: review prior reports, regulatory filings (ICAAP, ILAAP), financial statements, audit reports, internal credit policies, and management information systems.
• Explain scoping: define which products/portfolios (retail, SME, corporate), geographies, and processes you will prioritise based on risk indicators (NPL trends, concentration, rapid growth).
• Detail your testing approach: sample selection methods, key control tests (credit approval, collateral valuation, provisioning), and data analytics you would apply (trend analysis, outlier detection).
• Discuss on-site activities: interviewing management/staff, walkthroughs, corroborating documentation, and use of specialist resources (credit modelling, IT controls).
• Explain issue identification and escalation: classification of findings (deficiency, material weakness), drafting accurate facts, impact assessment and recommended supervisory actions.
• Describe communication and follow-up: exit meetings, written report with timelines, remediation expectations, and monitoring plan (deadlines, follow-up exams).
• Mention compliance with South African regulatory requirements and coordination with other supervisors or the Prudential Authority where needed.

What not to say

• Focusing only on checklists without explaining the risk-based rationale.
• Describing an overly intrusive or adversarial approach that damages supervisory relationships.
• Claiming you would rely solely on desk review without any targeted on-site validation when risks warrant it.
• Omitting mention of regulatory coordination, confidentiality, or legal limits to supervision.

Example answer

“I would apply a risk-based supervision framework. First, I would do a desk review of the branch’s recent NPL ratios, provisioning levels, large exposures, ICAAP submissions and internal audit reports. Given signs of rising NPLs in the SME book, I’d scope the exam to credit origination, underwriting, and post-sanction monitoring for that portfolio. My testing would combine targeted sampling of recent loans, collateral revaluations, and data analytics to detect concentration or score drift. On-site I would conduct walkthroughs with the credit, risk and branch operations teams and validate samples against supporting documents. Findings would be categorised by severity, discussed in an exit meeting, and followed by a formal report to management and the Prudential Authority with remediation deadlines and a monitoring plan. Throughout I would ensure proportionality, clear documentation, and coordination with legal and counterparty supervisors as required.”

Introduction

Supervisory examiners must manage teams, defend findings, and preserve professional relationships with regulated entities. This tests leadership, judgement, and stakeholder management—critical for a supervisory position in South Africa where engagement with senior bank executives and the Prudential Authority is frequent.

How to answer

• Use the STAR method: set the Situation and the Task your team faced.
• Explain your leadership actions: how you coached the team, ensured evidence quality, and maintained morale.
• Detail stakeholder engagement: how you prepared for discussions with bank management, presented evidence, and listened to counter-arguments.
• Describe conflict resolution steps: negotiation, escalation protocols, and involvement of senior supervisors if needed.
• Quantify the outcome: whether findings were accepted, modified, or escalated, and how the team’s approach improved processes or relationships.
• Reflect on lessons learned about leading under disagreement and how you implemented improvements thereafter.

What not to say

• Claiming you unilaterally imposed decisions without consulting your team or following due process.
• Admitting to ignoring contrary evidence or being unwilling to revisit findings.
• Taking personal credit and not acknowledging team contributions.
• Describing confrontational behaviour that damaged long-term supervisory relationships.

Example answer

“In a prior role I led a three-person team reviewing model validation practices where we found evidence of inadequate back-testing. Senior bank management challenged our conclusion, citing recent remediation initiatives. I ensured the team re-checked all evidence, prepared a concise packet showing our sample tests and exceptions, and rehearsed a calm, fact-based presentation. In meetings I acknowledged management’s remediation efforts but explained why the residual issues still met our materiality threshold. I escalated to my line manager only after mutually exploring corrective options. The outcome was a negotiated remediation plan with clear milestones; the bank accepted enhanced monitoring and we scheduled a follow-up exam in six months. The team remained engaged and morale improved because they saw rigorous, fair leadership in action.”

Introduction

Examiners must respond decisively to possible misconduct while complying with legal and procedural requirements. This situational question assesses your judgement, knowledge of reporting obligations (e.g., to the Prudential Authority and SARB), and ability to protect the integrity of the examination.

How to answer

• Start by stating immediate priority actions: secure evidence, stop further tampering, and limit distribution of sensitive information.
• Explain how you would preserve chain of custody for documents and digital records and document all steps taken.
• Describe notifying your supervisory manager and legal/compliance colleagues within your organisation, and following internal escalation procedures.
• Discuss how you would engage the bank: request explanations from senior management, but avoid accusatory language until validated.
• State reporting obligations: when to inform the Prudential Authority, law enforcement or other regulators in South Africa, and how to coordinate with them.
• Address confidentiality and whistleblower protections: safeguarding staff who raise concerns and ensuring fair process for implicated individuals.
• Conclude with follow-up actions: interim supervisory measures (restrictions, increased reporting), formal investigation plan, and communication timelines.

What not to say

• Rushing to publicly accuse individuals before verifying facts.
• Handling the matter alone without notifying your supervisors or legal advisors.
• Leaking information to unauthorised parties or external media.
• Failing to consider regulatory obligations or the need for documented evidence preservation.

Example answer

“My first step would be to secure and preserve the evidence—make copies of relevant reports, emails, and system logs, and limit access to the examination team. I would document all findings and immediately notify my supervisor and the legal/compliance function to confirm internal protocols. We would ask senior bank management for an explanation in a controlled setting while avoiding accusatory statements. Given indications of deliberate misreporting of liquidity metrics, I would follow mandatory reporting channels to the Prudential Authority and coordinate with them on next steps, which could include a formal investigation and interim supervisory measures like liquidity add-ons or reporting requirements. Throughout, I would ensure confidentiality to protect staff who provided information and maintain a clear audit trail. All actions would be proportional and within legal boundaries.”