- The Basel Committee on Banking Supervision (BCBS) continues to prioritize the full and consistent implementation of Basel III.
- Progresses work to strengthen supervisory effectiveness based on the lessons learned from the 2023 banking turmoil.
- Aims to finalize principles for the sound management of third-party risk in the banking sector by the end of 2025.
The Basel Committee on Banking Supervision met recently to discuss a range of initiatives.
On financial stability outlook, members exchanged views on recent market developments and the financial stability outlook for the global banking system. A heightened level of uncertainty and increased market volatility requires ongoing vigilance by banks and supervisors to ensure that the global banking system continues to maintain its resilience.
On the 2023 banking turmoil, BCBS took stock of its work to develop a suite of practical tools to support supervisors in their day-to-day work as part of its efforts to strengthen supervisory effectiveness in the light of the lessons learned from the 2023 banking turmoil. The initial work covered the supervision of liquidity risk and interest rate risk in the banking book, the assessment of the sustainability of banks’ business models and the importance of effective supervisory judgment.
The tools do not change or replace existing standards or guidelines and were designed to strengthen supervisory practices and effectiveness worldwide and an update on the outcome of this work by the end of the year.
Following an earlier meeting of the Group of Central Bank Governors and Heads of Supervision (GHOS), BCBS continues to prioritize the implementation of Basel III framework in full, consistently and as soon as possible. The Committee also discussed its analytical work to assess whether specific features of the Basel Framework performed as intended during the 2023 banking turmoil, such as liquidity risk and interest rate risk in the banking book.
BCBS reviewed the comments received on its consultation on supervisory principles for the sound management of third-party risk in the banking sector. It also discussed an analysis on the risks and benefits from banks’ reliance on third-party service providers, with a report expected by end of the year.
Other discussion included, recent developments related to artificial intelligence and digital fraud. adopting technological innovation in its work, and financial risks of extreme weather events.