Featured Product

    GHOS Endorses Coordinated Approach to Mitigate COVID Risks for Banks

    November 30, 2020

    The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS, endorsed a coordinated approach to mitigate COVID-19 risks to the global banking system. The GHOS members agreed to mark, with the present agreement on the Basel III framework, a clear end to the post-crisis Basel III policy agenda. Any further potential adjustments to Basel III will be limited in nature and consistent with the evaluation work of BCBS. Going forward, the Basel III-related work of BCBS will focus on monitoring the implementation, timeliness, and consistency of Basel standards through the Regulatory Consistency Assessment Program as well as completing an evidence-based evaluation of the effectiveness of these reforms, also taking into consideration the lessons learned from the COVID-19 crisis.

    The GHOS also endorsed a series of recommendations from the Basel Committee to focus its policy and supervisory agenda on future risks to the global banking system and its vulnerabilities. The recommendations followed a strategic review conducted by the Committee over the past year. The future work of the Basel Committee will focus on new and emerging topics, including structural trends in the banking sector, the ongoing digitalization of finance, and climate-related financial risk. Against the backdrop of the evolving risks and vulnerabilities in light of the ongoing COVID-19 crisis, GHOS members tasked the Basel Committee with continuing to pursue a coordinated approach in responding to the crisis, to preserve a global level playing field, and to avoid regulatory fragmentation. The approach comprises the following elements:

    • Ongoing monitoring and assessment of vulnerabilities and risks to the global banking system from COVID-19, along with information-sharing of supervisory insights during the crisis
    • Encouraging the use of flexibility embedded in the Basel framework, where relevant
    • Monitoring the implementation of temporary adjustments to mitigate current risks to the banking system, to ensure they are consistent with the objectives of the Basel framework and are unwound in a timely manner
    • Adopting additional global measures in a coordinated manner, where necessary and prudent

    The oversight body of BCBS noted that using capital and liquidity resources to help banks to absorb shock during the ongoing COVID-19 crisis "should take priority at present." GHOS members strongly support the repeated guidance from the Basel Committee that a measured drawdown of these buffers is appropriate in the current period of stress and until the COVID-19 crisis is over. After the crisis, supervisors will provide banks with sufficient time to rebuild their buffers, taking account of economic, market, and bank-specific conditions.

     

    Related Link: Press Release

     

    Keywords: International, Banking, COVID-19, GHOS, RCAP, Basel, Regulatory Framework, Liquidity Risk, Climate Change Risk, Regtech, BCBS

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7311