Featured Product

    BCBS Consults on Principles for Operational Risk and Resilience

    August 06, 2020

    BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks. COVID-19 pandemic has raised the importance of operational resilience and mitigating operational risk. The operational resilience principles aim to increase the capacity of banks to withstand disruptions due to potentially severe events while the updated principles on operational risk focus on change management and information and communication technologies (ICT). Comment period for both the consultations ends on November 06, 2020.

    The principles for sound management of operational risk have been revised post the 2014 BCBS review of the implementation of the principles. The review indicated that several principles had not been adequately implemented and that the principles did not sufficiently capture certain important sources of operational risk. Thus, BCBS is proposing a limited number of updates 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
    • Enhance the overall clarity of the principles

    In another associated consultation, BCBS is proposing a pragmatic, principles-based approach to operational resilience that will help to ensure proportional implementation across banks of various size, complexity, and geographical location. The proposed principles for operational resilience not only build on the proposed updates to the Principles for Sound Management of Operational Risk, but they are largely derived and adapted from the existing guidance on outsourcing, business continuity, and risk management-related guidance issued by BCBS or national supervisors over a number of years. The proposed 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. As an essential element of operational resilience, internationally active banks should consider whether their operational resilience efforts are appropriately harmonized with the stated actions, organizational mappings, and definitions of critical functions and critical shared services contained in their recovery and resolution plans as specified in the FSB Recovery and Resolution Planning framework. The principles aim to strengthen the ability of banks to withstand operational risk-related events, which could cause significant operational failures or wide-scale disruptions in financial markets, such as pandemics, cyber incidents, technology failures, or natural disasters. 

     

    Related Links

    Comment Due Date: November 06, 2020

    Keywords: International, Banks, Basel, Operational Resilience, Systemic Risk, Cyber Risk, ICT Risk, Outsourcing Arrangements, Business Continuity, BCBS

    Featured Experts
    Related Articles
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699