BCBS published a summary of its June meeting in Basel. At the meeting, BCBS members discussed a range of policy and supervisory issues and took stock of the members' implementation of post-crisis reforms. This was the first Basel Committee meeting chaired by Pablo Hernández de Cos, Governor of the Bank of Spain, following his appointment by Governors and Heads of Supervision in March 2019. The Committee discussed matters related to financial technology and crypto-assets and its work program for evaluating the impact of its post-crisis reforms, with the Committee committing to publish additional information of this work in due course.
At the meeting, the Committee:
- Agreed on a targeted and limited revision of the leverage ratio to allow margin received from a client to offset the exposure amounts of client-cleared derivatives. This revision, which will be published next week, seeks to balance the robustness of the leverage ratio as a safeguard against unsustainable levels of leverage with the G20 Leaders' commitment to promote the central clearing of standardized derivative contracts. The Committee will monitor the effect of this revision on the leverage ratio framework.
- Agreed on a set of disclosure requirements to curb leverage ratio window dressing. The standard will be revised to require banks to disclose their leverage ratios based on the quarter-end and average values of securities financing transactions. These disclosure requirements will be published next week.
- Approved a report on Pillar 2 supervisory practices and approaches, which will be published shortly.
- Reviewed the reports that assessed the implementation of the Net Stable Funding Ratio and large exposures standards in Australia, Canada, and India. Publication of these reports is expected in July.
- Agreed to join Network for Greening the Financial System (NGFS) as an observer, post discussions on the implications of the first comprehensive NGFS report.
- Agreed to conduct further work on financial technology, including on the risk management challenges associated with the use of artificial intelligence and machine learning in financial services.
- Will continue to assess the risks from crypto-assets and the best ways to address them.
- will publish, in due course, a a report on the regulatory and supervisory implications of open banking and application programming interfaces.
Related Link: Press Release
Keywords: International, Banking, Fintech, Crypto-Assets, Pillar 2, Leverage Ratio, Disclosures, Large Exposures, Climate Change Risks, BCBS
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.
The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.
The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)
The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).
The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications