The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology. BCBS annually assesses the systemic importance of global banks using an indicator-based methodology. It is now planning to replace the existing three-year review cycle of the assessment methodology with a process of ongoing monitoring and review. Comment period for this consultation ends on September 03, 2021.
The proposed process will include monitoring the:
- Recent developments in techniques or new indicators that can be used for the assessment of systemic risk
- Emerging evidence on the effectiveness of the G-SIB regime
- Structural changes that could impact the effectiveness of the regime
As part of this monitoring, BCBS will consider the roles of branches and subsidiaries and alternative methodologies for the substitutability category that would allow the cap to be removed. Only if this monitoring work reveals evidence of material unintended consequences or material deficiencies with respect to the objectives of the framework will the Basel Committee consider changes to the regime.
Comment Due Date: September 03, 2021
Keywords: International, Banking, Basel, G-SIB, G-SIB Assessment, Systemic Risk, BCBS
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Previous ArticleRegulatory Agencies in UK and US Issue Updates on LIBOR Transition
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Hong Kong Monetary Authority (HKMA) announced that the Green and Sustainable Finance (GSF) Cross-Agency Steering Group has launched the information and data repositories and outlined the progress made in advancing the development of green and sustainable finance in Hong Kong.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
The Network for Greening the Financial System (NGFS) published a report that explores the feasibility of integrating the G-Cubed general equilibrium model into the NGFS suite of models.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.