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

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News

    ISSB Standards May Become Effective from January 2024

    The International Organization of Securities Commissions (IOSCO) welcomed the confirmation statement by the International Sustainability Standards Board (ISSB) setting out its progress in the development of its first sustainability-related corporate disclosure standards.

    February 17, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8792