The Financial Stability Institute (FSI) of BIS launched a new publication series, FSI Insights on Policy Implementation, to contribute to international discussions on a range of policy issues and implementation challenges faced by the financial sector authorities. The series is intended to analyze practical regulatory and supervisory issues based on experiences in different member jurisdictions. The first two papers that have been launched as part of this series focus on proportionality and cyber risk.
The paper on proportionality conducts a cross-country comparison on proportionality in banking regulation. It explores the issue of effectively tailoring the regulatory requirements for different types of banks by comparing the approaches followed in six jurisdictions. These six jurisdictions are Brazil, the EU, Hong Kong Special Administrative Region (SAR), Japan, Switzerland, and the United States. The paper examines the range of approaches in terms of criteria and the thresholds used to differentiate banks; it also examines the approaches in terms of the regulatory standards that are subject to a proportional implementation. The paper highlights that the implementation of the proportionality strategy should respect prudential objectives and consider implications for the competitive environment.
The paper on cyber risk examines regulatory approaches to enhance cyber-security frameworks of banks. The paper highlights that only a handful of jurisdictions, such as Hong Kong SAR, Singapore, the United Kingdom, and the United States, have specific regulatory and supervisory initiatives for reducing cyber-risk for banks. It explores regulatory and supervisory initiatives in these jurisdictions and offers high-level policy considerations for banking supervisory authorities contemplating or planning to introduce or enhance cyber-risk regulation and supervision for banks.
Keywords: International, Banking, Proportionality, Cyber Risk, Basel, FSI, BIS
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