Featured Product

    BCBS Issues Principles for Operational Resilience and Risk

    March 31, 2021

    BCBS issued principles for operational resilience and revised the principles for sound management of operational risk, following an August 2020 consultation. The principles for operational resilience aim to strengthen banks' ability to withstand operational risk-related events that could cause significant operational failures or wide-scale disruptions in financial markets, such as pandemics, cyber incidents, technology failures or natural disasters. The principles for the sound management of operational risk have been revised to make technical revisions to align the principles with the recently finalized Basel III operational risk framework, update the guidance where needed in the areas of change management and information and communication technologies (ICT), and enhance the overall clarity of the principles.

    BCBS had conducted, in 2014, a review of the implementation of the principles for sound management of operational risk. The review was aimed to assess the extent to which banks had implemented the principles, identify significant gaps in implementation, and highlight emerging and noteworthy operational risk management practices at banks not currently addressed by the principles. The 2014 review had identified that several principles had not been adequately implemented and further guidance would be needed to facilitate their implementation in certain areas. The revised principles for sound management of operational risk for banks cover governance, the risk management environment, information and communication technology, business continuity planning,; and the role of disclosures. These elements should not be viewed in isolation; rather, they are integrated components of the operational risk management framework and the overall risk management framework (including operational resilience) of the group. BCBS recommends that banks should take account of the nature, size, complexity and risk profile of their activities when implementing the Principles.

    The principles for operational resilience build on the principles for sound management of operational risk and are largely derived and adapted from existing guidance on outsourcing-, business continuity- and risk management-related guidance issued by BCBS or national supervisors over a number of years. By building on the existing guidance and current practices, BCBS is seeking to develop a coherent framework and avoid duplication. The operational resilience principles focus on governance, operational risk management, business continuity planning and testing, mapping interconnections and interdependencies, third-party dependency management, incident management, and resilient cyber security and ICT. The approach draws from the previously issued principles on corporate governance for banks as well as outsourcing-, business continuity- and relevant risk management-related guidance.

     

    Related Links

    Keywords: International, Banking, Basel, Operational Risk, Operational Resilience, Guidance, Outsourcing Risk, Third-Party Risk, Cyber Risk, COVID-19, BCBS

    Featured Experts
    Related Articles
    News

    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.

    June 21, 2022 WebPage Regulatory News
    News

    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).

    June 21, 2022 WebPage Regulatory News
    News

    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.

    June 21, 2022 WebPage Regulatory News
    News

    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.

    June 21, 2022 WebPage Regulatory News
    News

    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.

    June 17, 2022 WebPage Regulatory News
    News

    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.

    June 17, 2022 WebPage Regulatory News
    News

    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)

    June 16, 2022 WebPage Regulatory News
    News

    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.

    June 16, 2022 WebPage Regulatory News
    News

    BIS Bulletins Discuss DeFi Lending and Aspects of Crypto-Assets

    The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.

    June 16, 2022 WebPage Regulatory News
    News

    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.

    June 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8292