Featured Product

    BCBS Publishes Results of Survey on Proportionality in Bank Regulation

    March 19, 2019

    BCBS published a report presenting the results of a survey conducted on proportionality practices in bank regulation and supervision. The Basel Committee conducted this survey among its members and those of the Basel Consultative Group (BCG), in an effort to take stock of the proportionality measures in place across jurisdictions.

    The following are the key findings of the survey:

    • The majority of respondents to the survey apply proportionality measures in their jurisdictions. In most cases, such measures are applied to banks that represent a relatively small share of total banking assets in the relevant jurisdiction, although there is a fair degree of heterogeneity.
    • Jurisdictions rely on a number of determinants in identifying proportionality thresholds/segments. These include a wide number of balance sheet metrics and differentiation by bank business models. In most cases, these indicators are coupled with supervisory judgment when determining the scope of banks subject to different requirements.
    • Most jurisdictions apply some form of proportionality related to capital and liquidity requirements. These generally take the form of a modified/simpler version of the existing Basel standards, particularly for the more complex risk categories, or an exemption from such requirements for certain banks.
    • Jurisdictions similarly apply proportionate reporting and disclosure requirements, with some banks subject to less onerous requirements and submission frequencies.
    • Most jurisdictions also apply a proportionate approach to their supervisory practices, including the intensity of on- and off-site examinations, requirements related to risk management controls and governance, and supervisory stress tests.

    The majority of the respondents indicated that they have future plans related to proportionality, while just under half of BCG respondents indicated likewise. These include plans to review the existing proportionality regimes, including the scope for developing simpler approaches for capital and liquidity requirements, reducing reporting and disclosure requirements, and reviewing the scope of banks subject to proportionality measures, and the associated threshold determinants. Some jurisdictions noted that they plan to apply a proportionate approach to supervision. A few jurisdictions that do not apply proportionality measures indicated that they plan to consider introducing a proportionality regime in the future.

     

    Related Links

    Keywords: International, Banking, Basel III, Proportionality, Banking Supervision, Banking Regulation, BCBS

    Featured Experts
    Related Articles
    News

    EC to Defer Application of SFDR Standards Till July 2022

    The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.

    July 23, 2021 WebPage Regulatory News
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    ESMA Responds to Proposal Related to Sustainability Standards Board

    The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.

    July 21, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7283