BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers. The announced projects include three projects for the upcoming Eurosystem Center, the first comprehensive explorations in cyber security, and the start of the second phase of the green finance project of the Hong Kong center.
The Eurosystem Center is expected to open in the coming months, with locations in Frankfurt and Paris and working together with all 19 euro area central banks and the European Central Bank. The Innovation Hub will also expand its portfolio in the areas of green finance and supervisory and regulatory technology (regtech and suptech). The first three Eurosystem Center projects involve:
- Developing a cryptocurrency market intelligence platform—The project's goal is to create an open-source market intelligence platform to shed light on market capitalizations, economic activity, and risks to financial stability. The project intends to provide comprehensive insights and improve transparency through data on asset backing, trading volumes, and market capitalization.
- Securing privacy of payments systems—This project will investigate and test potential cryptographic solutions that can withstand the vastly improved processing power of quantum computers. The goal is to test use cases in various payment systems and examine how the introduction of quantum-resistant cryptography will affect their performance.
- Enhancing transparency of climate-related disclosures—This project aims to build an open-source database of corporate reports coupled with a full-text search engine to identify sustainability-related disclosures. Machine learning and natural language processing tools will then be used to organize and structure this data.
In addition to the Eurosystem initiatives, the Hong Kong Center of the Innovation Hub will partner with the Bank of Israel and the Hong Kong Monetary Authority (HKMA) on Project Seala, which will explore technological solutions to allow intermediaries to provide central bank digital currencies (CBDCs) to users without the related financial exposure (reducing risks and costs in the process), combined with a strong focus on cyber-security. The Hong Kong Center will also start a new phase of its green finance Genesis project, wherein blockchain, smart contracts, and other related technologies will be used for the tracking, delivery, and transfer of digitized Mitigation Outcome Interests—de facto carbon credits recognized under national verification mechanisms compliant with the Paris Agreement—attached to a bond.
Related Link: Press Release
Keywords: International, Banking, Securities, Regtech, Suptech, CBDC, Cryptocurrencies, ESG, Climate Change Risk, Disclosures, Green Finance, Financial Stability, NLP, Green Bond, Blockchain, Smart Contracts, Project Genesis, Project Sela, HKMA, UNFCCC, BIS
Featured Experts
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Related Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
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.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
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.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
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.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
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.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
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.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.
EC Publishes Draft Regulations Supplementing CRR and CRD IV
The European Commission (EC) published text for the regulation that sets out regulatory technical standards specifying the criteria for assessing the modelability of risk factors under the internal model approach
