Featured Product

    BCBS Publishes High-level Considerations on Proportionality

    July 07, 2022

    The Basel Committee on Banking Supervision (BCBS) published high-level considerations on proportionality. The considerations are intended to provide practical support to supervisory authorities that seek to implement proportionality in their domestic regulatory and supervisory frameworks, in a way that does not undermine the stability or safety of financial institutions.

    The document includes high-level considerations to guide decision-making and technical annexes outlining more specific considerations for various elements of the Basel framework. The Basel Consultative Group (BCG) developed these high-level considerations, the application of which will be voluntary and does not modify the core principles for effective banking supervision (BCPs), Basel framework, or any of the Committee's existing standards, guidelines, or sound practices. The Basel Committee does not intend to use these considerations or the accompanying technical annexes to assess proportionality in member or non-member jurisdictions and under the Regulatory Consistency Assessment Program (RCAP). Proportionality in financial system regulation and supervision can ensure that the applicable rules and supervision practices are consistent with the systemic importance and risk profile of banks and are appropriate for the broader characteristics of a particular financial system. To implement proportionality approach across and within jurisdictions, the authorities should consider the following high-level considerations:

    • Proportionality approaches should be consistent with the core principles for effective banking supervision to preserve financial stability.
    • Basel framework is the standard for internationally active banks and it already embeds a menu of options with various elements of proportionality and flexibility that could be the first choice whenever appropriate and possible.
    • The regulation for non-internationally active banks should be customized depending on local circumstances.
    • Effective proportionate approaches should be both conservative and simple to understand and implement.
    • Proportionality should help authorities achieve an appropriate intensity of supervision for all banks.
    • Proportionate approaches should provide regulatory certainty, without being overly static.
    • Proportionality approaches should include supervisory discretion that will allow supervisors to respond to bank behaviors and financial system developments.

     

    Related Links

     

    Keywords: International, Banking, Basel, Proportionality, Systemic Risk, Financial Stability, Basel Core Principles, Basel Consultative Group, BCBS

    Featured Experts
    Related Articles
    News

    EBA Launches Stress Tests for Banks, Issues Other Updates

    The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.

    January 31, 2023 WebPage Regulatory News
    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
    RESULTS 1 - 10 OF 8700