Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance. The Innovation Hub and the Italian G20 Presidency have published problem statements to identify challenges in data collection, verification, and sharing; analyze and assess physical and transition climate risks; and connect projects and investors. The closing date for applications is May 31, 2021. The shortlisted teams will be announced on June 14, 2021 and invited to showcase their prototypes at a workshop in August 2021 for feedback from national authorities and experts. Winners will be announced in October 2021.
The BIS Innovation Hub, through its Singapore Center, and the Italian G20 Presidency have published three high-priority operational problems and invited private firms to develop innovative technological solutions. The problem statements identify the following challenges, highlighted by submissions from G20 finance ministries and central banks:
- Data collection, verification, and sharing. A perception of information asymmetry exists in the collection and sharing of environmental data to support environmental risk analysis. This stems from lack of consistent data methods and disclosure regimes, along with a limited verification of self-reported returns that negatively affect confidence in the reliability of aggregated data sets. In this context, the problem statement questions whether technological solutions contribute to a disclosure ecosystem that supports all stakeholders while reducing the disclosure workload and costs for corporates and other reporting entities and respecting data privacy policies in individual countries. It also raises a question whether technological solutions are deployed to aid in better capturing and structuring relevant climate-related (meta)data digitally, including through a "rulebook" that showcases how rules and data requirements can be delivered as code in a consistent, high quality, transparent, comparable, and standardized way, to enhance environmental risk analysis.
- Analysis and assessment of physical and transition risks. One of the main difficulties facing non-financial corporations and financial corporations alike is the ability to accurately predict the vulnerabilities associated with transition and physical risks posed by climate change. As the world transitions toward climate-neutrality, there is a need to support institutions and relevant stakeholders with tools enabling them to visualize, predict, assess, and monitor transition and physical risks. The problem statement questions whether big data ingestion, predictive analytics, and visualization tools can be developed to aid both regulators and institutions/corporates to better assess and analyze these risks across different regions, sectors, and asset classes.
- Improvement in connecting projects and investors. The problem statement questions whether technological solutions help connect projects and investors to scale up their impact in a secure way while respecting data privacy policies in individual countries. It further raises a question related to whether technological solutions also be used to effectively track platform performance and outcomes in terms of volume and quality of credit allocation and environmental impact and be deployable across geographies and different states of development.
Interested participants can compete and develop innovative solutions to address these problems using a dedicated platform, through which Codemotion will facilitate registration and online judging of project proposals, and the IBM Cloud for prototype building. An independent expert panel organized and sponsored by the Bank of Italy will judge the submissions and identify the most promising solutions.
Keywords: International, Europe, Italy, Banking, Climate Change Risk, Sustainable Finance, Reporting, Disclosures, Fintech, Regtech, Techsprint, G20, Innovation Hub, BDI, BIS
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
The European Banking Authority (EBA) published answers to 29 questions in the Single Rulebook Question and Answer (Q&A) tool in September.
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards