BIS Hub Develops Prototype Supervisory Analytics Platform
The Bank for International Settlements (BIS) published working papers and the Singapore Center of its Innovation Hub developed the prototype of a supervisory analytics platform, in collaboration with the Monetary Authority of Singapore (MAS).
The prototype supervisory analytics platform is named Project Ellipse, which explores how supervision could become insights-based and data-driven using an integrated regulatory data and analytics platform. The platform demonstrates how regulatory and other data, such as articles and news, can be integrated into a single platform to help regulatory authorities identify potential risks to banks and the banking system. It combines structured and unstructured sources of data in real time and uses advanced analytics to provide supervisors with early warning indicators, analytics, and prudential metrics for banking supervision. BIS will launch an Ellipse collaboration community (as a 12-month pilot program) to share, further test, customize, and scale this solution across regulatory authorities worldwide. The Ellipse prototype is the first to be published on BIS Open Tech, a new platform for sharing statistical and financial software as public goods, thereby promoting international cooperation and coordination. Entities that supported this project include the Bank of England (BoE), the International Swaps and Derivatives Association (ISDA), the Financial Network Analytics (FNA), and Accenture.
Two of the working papers BIS published in March demonstrate an investment strategy based on deconstructing environmental, social, and governance (ESG) scores and assess the gains from international macro-prudential policy coordination. The first paper demonstrates an investment strategy that focuses on specific underlying ESG categories such as emissions reduction and human rights. To implement the investment strategy, the authors exclude firms with the lowest scores in certain ESG categories of interest and implement a best-in-class investment strategy. This approach helps investors overcome the "aggregated confusion" inherent in ESG scores. Moreover, it enables investors to better track the sustainability performance trajectory of their portfolio against their stated sustainable investment objectives. The second paper finds that a countercyclical response in capital requirements induces a global bank to engage in regulatory arbitrage and discusses the broad policy implications of the analysis conducted. One of the conclusions of this analysis is that future research should also consider the possibility of leakages from regulated banks to non-regulated (shadow) financial intermediaries within jurisdictions.
Related Links
- Press Release on Project Ellipse
- Project Ellipse (PDF)
- Open Tech Platform
- Paper on Deconstructing ESG Scores
- Paper on Cross-Border Macro-Prudential Policy
Keywords: International, Banking, ESG, Sustainable Finance, Climate Change Risk, Reporting, Basel, Macro-prudential Policy, Regulatory Capital, Project Ellipse, Digital Regulatory Reporting, Regtech, Suptech, BIS
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
US Agencies Publish Multiple Regulatory and Reporting UpdatesNext Article
BoE and PRA Seek Views on HQLA Usability IssuesRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
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).
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.
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.
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.
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.
