The Basel Committee (BCBS) and the Basel Consultative Group (BCG) issued a joint statement specifying that they support the use of proportionality in implementing the Basel framework in a manner consistent with the Basel Core Principles. The core principles for effective banking supervision embed the role of proportionality, including that "supervisory practices should be commensurate with the risk profile and systemic importance of the banks being supervised." These principles are relevant for all banks and jurisdictions worldwide and provide the basis for a resilient banking system.
The statement emphasizes that a proportionate regulatory framework should not reduce the resilience of banks or dilute the prudential regulatory framework, but rather reflect the relative differences in risk and complexity across banks and the markets in which they operate. As the Basel Framework comprises minimum standards, jurisdictions are free to apply more conservative requirements. A proportionate framework should also consider supervisory capacity and resources, particularly when implementing more complex standards.
BCBS expects the Basel Framework (encompassing the Basel III standards) to be implemented in full by Committee member jurisdictions for internationally active banks. A recent BCBS stocktake of proportionality measures in place across jurisdictions highlighted that a majority of Committee and BCG jurisdictions already apply such measures. Moreover, proportionality can take different forms, including implementing the most appropriate approaches among those available in the Basel Framework for internationally active banks in member jurisdictions and implementing standards for banks in non-BCBS member jurisdictions that are broadly consistent with the principles of the applicable Basel standards.
Keywords: International, Banking, Basel III, Basel Core Principles, Proportionality, Basel Consultative Group, BCBS
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)