Featured Product

    BIS Publications Focus on Climate Risk, Regtech, and Lending Issues

    February 28, 2022

    The Bank for International Settlements (BIS) published the Quarterly Review, which covers developments in global banking and financial markets and contains three special features that examine the non-bank lending in syndicated loan market, the growing role of global banks' foreign branches, and the post-pandemic prospects for global growth. The feature on lending offers an overview of global syndicated lending by non-banks and contrasts it with that by banks, before moving on to investigate the role of non-banks in cross-border spillovers during financial crises and the policy considerations around this issue. The feature notes that lending by non-banks is more across countries and industries and, in the wake of a crisis at home, non-banks curtail lending to foreign borrowers by more than they do to domestic ones, thus transmitting shocks across countries. BIS also released publications that discuss regulatory response to climate risks and topics related to technology and lending.

    The key highlights of the aforementioned publications follow:

    • The Financial Stability Institute (FSI) brief on regulatory response to climate risks highlights need for authorities to review their prudential frameworks with a view to taking full account of the implications of climate-related financial risks for financial stability. The paper suggests that standard Pillar 1 instruments might be suboptimal in addressing climate risks, instead the intrinsic flexibility of the Pillar 2 framework ensures that banks effectively manage such risks and have sufficient loss-absorbing capacity against them. The paper also notes that applying the current macro-prudential framework to contain systemic climate-related financial risks is likely to be ineffective and potentially counterproductive for financial stability. 
    • The BIS paper on the importance of information technology in banking and entrepreneurship builds a model of bank screening and lending, which predicts that in banking technology can spur entrepreneurship by making it easier for start-ups to borrow against collateral. Among other issues, the paper contributes to the recent literature that investigates how the rise of fintech affects credit-scoring and credit supply.
    • The Irving Fisher Committee (IFC) paper on the use of big data in Asian central banks reveals that Asian central banks define big data in a more encompassing way that includes unstructured non-traditional as well as structured datasets. The interest in big data appears higher in Asia, including at the senior policy level while the focus is on projects developed to process natural language, conduct nowcasting/monitoring exercises, and develop applications to extract economy insights as well as suptech/regtech solutions. Asian central banks report dealing with big data to support a wide range of tasks, with big data posing challenges related to cyber-security and data strategy.
    • Another paper from BIS estimates the conditional treatment effects of the European Investment Bank (EIB) lending to small and medium enterprises (SMEs) in Europe. The results show that positive effects of EIB-supported lending on job creation and investments were larger for smaller and younger firms. The benefits of EIB support appear to be linked to longer loan maturities. Moreover, better pricing conditions are associated with a stronger effect on employment and fixed assets growth, while no evidence was found that the effects vary depending on loan size.

     

    Related Links

     

    Keywords: International, Banking, Quarterly Review, Lending, Syndicated Loans, Credit Risk, Climate Change Risk, Basel, Big Data, Regtech, Suptech, SME, IFC, ESG, Loan Origination, Foreign Bank Branches, BIS, FSI

    Featured Experts
    Related Articles
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    News

    BCBS Consults on Disclosure of Climate Risks, Issues Other Updates

    The Basel Committee on Banking Supervision (BCBS) launched consultation on a Pillar 3 disclosure framework for climate-related financial risks, with the comment period ending on February 29, 2024.

    December 18, 2023 WebPage Regulatory News
    News

    US Government Moves to Regulate Development and Use of AI Models

    The U.S. President Joe Biden signed an Executive Order, dated October 30, 2023, to ensure safe, secure, and trustworthy development and use of artificial intelligence (AI).

    December 18, 2023 WebPage Regulatory News
    News

    MAS Launches Gprnt Digital Platform for ESG Reporting for SMEs

    The Monetary Authority of Singapore (MAS) launched an integrated digital platform, Gprnt, also known as “Greenprint.”

    November 29, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8949