March 12, 2019

Sabine Lautenschläger, Member of the Executive Board of ECB and Vice-Chair of the Supervisory Board of ECB, spoke at the at the 20th anniversary conference of FSI. She emphasized the need find the right balance between risk-sensitivity and simplicity of Basel III rules and spoke in favor of having a risk-sensitive capital framework, although restricted by important backstops. She also outlined certain remaining issues that should be dealt with or discussed at BCBS, some of which she mentioned are already part of the 2019 work program of BCBS.

Ms. Lautenschläger believes that "the basic architecture of Basel III is solid and that it will serve us well for years to come." She agreed with the idea of not coming up with a new framework every three years and instead focusing on implementation while also emphasizing that she does not want to give the impression that she is in favor of less regulation. With respect to the issues to be dealt with at the BCBS, she mentioned that work can be done to improve joint understanding of emerging risks in the banking sector, to exchange information on standards and best practices on new or increasingly relevant topics, and on a minimum convergence of supervisory practices. She also mentioned the following: 

  • First and foremost, BCBS should monitor how the new Basel rules are implemented in national laws and ensure it has a thorough overview of how these are then translated into supervisory practices.
  • The Basel Committee should also foster an intensive exchange of information about the current and emerging risks and vulnerabilities. These discussions should also cover the approaches supervisors could use to analyze, assess, and react to these upcoming risks via Pillar 2 or other instruments. 
  • BCBS could and should be a hub for exchanging supervisory knowledge, tools, and approaches regarding cyber risk.
  • BCBS could be of great help for supervisors regarding operational, legal, and reputational risks in banks, which are linked to conduct risks or anti-money laundering. The same is true for green finance or climate-related risk. Here, too, a structured exchange of information about different tools and methods would help to strengthen supervision globally.

 

Related Link: Speech

 

Keywords: International, Europe, EU, Banking, Basel III, Pillar 2, Cyber Risk, Operational Risk, Climate Related Risk, ECB, BCBS, BIS

Related Articles
News

US Agencies Consult on Capital Treatment of Land Development Loans

US Agencies (FDIC, FED, and OCC) issued a proposed rule on the treatment of loans that finance the development of land for purposes of the one- to four-family residential properties exclusion in the definition of high volatility commercial real estate (HVCRE) exposure in the regulatory capital rule.

July 12, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Second Update for July 2019

Under the Single Rulebook question and answer (Q&A) updates for this week, EBA published answers to five questions related to supervisory reporting.

July 12, 2019 WebPage Regulatory News
News

ESMA Updates Manual for European Single Electronic Format in EU

ESMA updated the reporting manual for European Single Electronic Format (ESEF).

July 12, 2019 WebPage Regulatory News
News

FED Updates Supplemental Instructions for Reporting Form FR Y-9C

FED updated the supplemental instructions for FR Y-9C reporting.

July 12, 2019 WebPage Regulatory News
News

EBA Publishes Report on Monitoring Implementation of LCR in EU

EBA published its first report on the monitoring of the implementation of liquidity coverage ratio (LCR) in EU.

July 12, 2019 WebPage Regulatory News
News

EIOPA Consults on Reporting and Disclosures Under Solvency II Review

EIOPA launched a consultation package on supervisory reporting and public disclosure in the context of its work linked with the 2020 Solvency II review.

July 12, 2019 WebPage Regulatory News
News

APRA Applies Additional Capital Requirements to Three Australian Banks

APRA is applying additional capital requirements to three major banks in Australia to reflect higher operational risk identified in their risk governance self-assessments.

July 11, 2019 WebPage Regulatory News
News

IMF Report on 2019 Article IV Consultation on Euro Area Policies

IMF published its staff report in context of the 2019 Article IV consultation on euro area policies with member countries.

July 11, 2019 WebPage Regulatory News
News

FSB to Survey Practices on Cyber Incident Response and Recovery

FSB launched a survey on the industry practices on cyber incident response and recovery.

July 11, 2019 WebPage Regulatory News
News

ECB Appoints New Members of Supervisory Board

The Governing Council of ECB appointed Edouard Fernandez-Bollo, Kerstin af Jochnick, and Elizabeth McCaul as representatives to the Supervisory Board of ECB Banking Supervision, for a five-year non-renewable term.

July 11, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3441