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
IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.
BIS announced that it will establish new Innovation Hub centers across Europe and in North America in cooperation with member central banks.
FED updated the reporting form for FR 2052a, which is used to monitor the overall liquidity profile of certain supervised institutions.
PRA published a statement that sets out its views on certain amendments made to Capital Requirements Regulations (CRR and CRR2) via EU Regulation 2020/873 (CRR "Quick Fix"), including some guidance for firms.
The Climate Financial Risk Forum (CFRF), which is a joint climate risk forum of FCA and PRA, published a guide written by the industry for the industry to help firms approach and address climate-related financial risks.
IAIS published an application paper on liquidity risk management for insurers.
EBA published its response to the EC consultation on a new Digital Finance Strategy for Europe.
EIOPA responded to the EC consultation on a new digital finance strategy for Europe.
ESMA published its response to the EC consultation on the new digital finance strategy for EU.
FSB published, for consultation, a report on evaluation of the too-big-to-fail (TBTF) reforms for systemically important banks.