BCBS Issues Principles for Operational Resilience and Risk
BCBS issued principles for operational resilience and revised the principles for sound management of operational risk, following an August 2020 consultation. The principles for operational resilience aim to strengthen banks' ability to withstand operational risk-related events that could cause significant operational failures or wide-scale disruptions in financial markets, such as pandemics, cyber incidents, technology failures or natural disasters. The principles for the sound management of operational risk have been revised to make technical revisions to align the principles with the recently finalized Basel III operational risk framework, update the guidance where needed in the areas of change management and information and communication technologies (ICT), and enhance the overall clarity of the principles.
BCBS had conducted, in 2014, a review of the implementation of the principles for sound management of operational risk. The review was aimed to assess the extent to which banks had implemented the principles, identify significant gaps in implementation, and highlight emerging and noteworthy operational risk management practices at banks not currently addressed by the principles. The 2014 review had identified that several principles had not been adequately implemented and further guidance would be needed to facilitate their implementation in certain areas. The revised principles for sound management of operational risk for banks cover governance, the risk management environment, information and communication technology, business continuity planning,; and the role of disclosures. These elements should not be viewed in isolation; rather, they are integrated components of the operational risk management framework and the overall risk management framework (including operational resilience) of the group. BCBS recommends that banks should take account of the nature, size, complexity and risk profile of their activities when implementing the Principles.
The principles for operational resilience build on the principles for sound management of operational risk and are largely derived and adapted from existing guidance on outsourcing-, business continuity- and risk management-related guidance issued by BCBS or national supervisors over a number of years. By building on the existing guidance and current practices, BCBS is seeking to develop a coherent framework and avoid duplication. The operational resilience principles focus on governance, operational risk management, business continuity planning and testing, mapping interconnections and interdependencies, third-party dependency management, incident management, and resilient cyber security and ICT. The approach draws from the previously issued principles on corporate governance for banks as well as outsourcing-, business continuity- and relevant risk management-related guidance.
Related Links
Keywords: International, Banking, Basel, Operational Risk, Operational Resilience, Guidance, Outsourcing Risk, Third-Party Risk, Cyber Risk, COVID-19, BCBS
Featured Experts

Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
BCB Issues Rules on Credit Risk and Reporting Requirements for BanksRelated Articles
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
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.
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.
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.
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.
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.
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.
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
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.
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