BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards and establish an International Sustainability Standards Board or ISSB. BCBS also published a newsletter calling on banks to improve their resilience to cyber threats. Following the publication of a series of analytical reports on climate-related financial risks in April 2021, BCBS is assessing the extent to which the Basel framework adequately mitigates such risks. As part of this work, it is developing a set of related supervisory practices, which it plans to consult on later this year. It will also consider whether any additional disclosure, supervisory, and/or regulatory measures are needed.
In the newsletter on cyber security, BCBS notes that it is important for all banking authorities to encourage the institutions they oversee to adopt tools, effective practices, and frameworks, including provisions for testing their efficacy, for cyber risk management that are aligned with widely accepted industry standards. Adopting such approaches will allow banks to better identify, assess, manage, and mitigate their exposures to cyber risks, including those arising from third-party service providers. This will foster greater resilience to cyber threats and incidents in furtherance of the Principles for the Sound Management of Operational Risk (PSMOR) and the Principles for Operational Resilience (POR), which the BCBS published in March 2021. BCBS, in general, does not endorse any particular tool, effective practice, or framework, but welcomes the adoption by banks of those in use globally that align with widely accepted industry standards. The commonality of content and form across these standards demonstrates the global consensus that now exists on key cyber security principles. Available tools, effective practices, and frameworks aligned with industry standards include the National Institute of Standards and Technology (NIST) Cybersecurity Framework, the International Organization for Standardization (ISO) 2700x, and the Center for Internet Security Critical Security Controls. In addition, supervisors may wish to encourage their banks to use resources such as the FSB's Cyber Incident Response and Recovery toolkit and its cyber lexicon. Many of these tools, effective practices, and frameworks are publicly and freely available to banks.
Related Links
Keywords: International, Banking, Newsletter, Fintech, Climate Change Risk, ESG, ISSB, IFRS, Operational Resilience, Operational Risk, Cyber Risk, Regtech, Reporting, Disclosures Basel, BCBS
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
OCC Revises Retail Lending Booklet of Comptroller's HandbookRelated Articles
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
EU to Amend Credit Risk Adjustment Rules; ESAs Submit Queries on SFDR
The European Council published a draft Commission Delegated Regulation to amend the regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.
MAS Amends Notice 635 and Issues Second Proposal on Green Taxonomy
The Monetary Authority of Singapore (MAS) published amendments to Notice 635, which sets out requirements that a bank in Singapore has to comply with when granting an unsecured non-card credit facility to individuals.
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.