Featured Product

    Agustín Carstens of BIS Speaks About New Role of Central Banks

    March 14, 2019

    While speaking at the 20th anniversary conference of the Financial Stability Institute (FSI), Agustín Carstens, the General Manager of BIS, highlighted the need for regulatory actions in light of the continued evolution of financial technology. He began by discussing the challenges arising from the assumption of financial stability responsibilities by central banks and then examined the impact of recent technological developments on the relevant policy framework and the role of financial-sector authorities. Finally, he also discussed the planned role of FSI in addressing the challenges at hand.

    He highlighted that the recent technological developments further complicate the framework in which central banks and supervisory authorities should perform their responsibilities. The challenge for policymakers is, naturally, to maximize the benefits of fintech while minimizing risks to the financial system. He emphasized that, to move forward, authorities need to:

    • Develop a comprehensive understanding of the fintech businesses in their jurisdiction
    • Carefully consider the need to adjust the regulatory perimeter to accommodate new entities or activities to ensure adequate control of risks and a level playing field
    • Coordinate regulatory actions at the global level to the extent possible
    • Embrace technology, keeping in mind that the recent advances in artificial intelligence and its practical application in machine learning, natural language processing, and other advanced analytic capabilities have provided opportunities for developing tools to enhance supervisory capacity

    Mr. Carstens noted that recent developments point to an emerging need for regulatory actions. The actions should be proportionate, holistic and, ideally, internationally coordinated. The central banks and supervisory authorities should continue to focus on their core functions related to financial stability and adequate market functioning. He also added that technological developments have strengthened the case for the independence of central banks and supervisory authorities. Independent regulators could be in a better position to take time-consistent actions and pay due attention to different scenarios to ensure that new technologies develop in an orderly way without undermining financial stability. He further discussed that BIS is determined to contribute substantially to the objectives: to develop a comprehensive and integrated analysis of economic and financial stability and to incorporate, in the policy analysis and decision-making processes, all relevant implications of technological innovation for the financial system. He then described several elements of "Innovation BIS 2025," which is the new medium-term strategy of BIS:

    • To continue the efforts to develop a conceptually integrated framework for financial stability policies
    • To take several initiatives to better understand the implications of technological developments for the financial system and help stakeholders to make effective use of them in their own policy formation 
    • To strengthen the efforts to contribute to the dissemination of good policy practices, to support capacity-building, and to facilitate interaction among regulators

    Mr. Carstens mentioned that FSI will play a key role in several of these initiatives. FSI can contribute to the efforts of financial-sector authorities to address the new challenges by facilitating the dissemination of information and analysis on relevant topics and by fostering the exchange of practices and experiences among supervisors. Mr. Carstens further stated that FSI will create a repository of technology-related regulatory developments. In addition, it will continue developing comparative studies on distinct regulatory and supervisory approaches followed in different jurisdictions. Finally, FSI will further develop a recently created informal network of technology specialists in supervisory organizations to exchange practices and experiences on technological developments. 


    Related Link: Speech


    Keywords: International, Banking, Financial Stability, Proportionality, Fintech, Regtech, Suptech, FSI, BIS

    Related Articles

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory 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

    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

    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

    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

    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

    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

    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
    RESULTS 1 - 10 OF 8952