Where next for the Basel Committee?
Keynote speech by Pablo Hernández de Cos, Chair of the Basel Committee on Banking Supervision and Governor of the Bank of Spain, at the Eurofi High-level Seminar 2023, Stockholm, 28 April 2023.
There are five broad themes that I will cover today – all of which have a bearing, directly or indirectly, on the recent banking turmoil and the short- to medium-term risks for the global banking system. But let me give you the headline messages upfront:
- there is a wide range of both short-term risks and medium-term structural changes that are testing and will continue to test the resilience of the global banking system;
- now is not the time for complacency or regulatory rollbacks; and
- safeguarding financial stability requires global cooperation more than ever.
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Over the coming two years, the Committee will publish an analytical report on the bank and supervisory implications of the ongoing digitalisation of finance. The report will review and synthesise a wide range of technological developments, including the emergence of new entrants/suppliers in the banking system, the use of artificial intelligence and machine learning, big data and governance arrangements. It will also draw on a deep dive analysis under way on the supervisory implications of banking as a service.
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The third theme of the Committee’s work programme is climate-related financial risks, which, together with the digitalisation of finance, are perhaps the most existential medium-term threats to the global banking system. The Committee will continue to pursue a holistic approach in this area. This will include work across all three pillars of regulation, supervision and disclosure.