BCBS Met to Discuss Challenges for Bank Supervision and Regulation
The Group of Central Bank Governors and Heads of Supervision (GHOS) met, on November 26–27, in Abu Dhabi to discuss a range of policy and supervisory topics. GHOS represents nearly 80 jurisdictions and is the governing body of BCBS. In addition, the 20th International Conference of Banking Supervisors (ICBS), which was hosted by the Central Bank of the United Arab Emirates, took place on November 28-29, 2018.
At the November 26-27 meeting, the Basel Committee:
- Agreed to a set of targeted revisions to the market risk framework, which will be submitted to the GHOS. The revised framework seeks to enhance the risk-sensitivity of standardized approach, revise the calibration of certain elements of the framework, and improve certain aspects of the internal models approach. If endorsed by GHOS, the framework would be published in early 2019.
- Agreed to consult on the potential enhanced disclosures to reduce bank window-dressing behavior related to the leverage ratio.
- Approved a set of revisions to the Pillar 3 disclosure framework, which will be published in December.
- Reviewed a report setting out the range of bank, regulatory, and supervisory cyber-resilience practices across jurisdictions. This report will be published in December.
- Discussed the ongoing evaluation of its post-crisis reforms, including the usability of capital buffers. Members reaffirmed the usefulness of buffers as a loss-absorbing mechanism. BCBS took note of the comments received on its discussion paper on the regulatory treatment of sovereign exposures.
- Discussed the work program and strategic priorities for 2019, which will be published in early 2019, following a review and endorsement by GHOS.
- Agreed to consult next year on a framework that would consolidate the Committee's standards into a single integrated framework.
ICBS included keynote speeches by His Excellency Mubarak Rashed Al Mansoori, the Governor of the Central Bank of the United Arab Emirates; William Coen, the Secretary General of the BCBS; and Sir John Vickers, the Warden of All Souls College at Oxford University, along with the panel discussions comprising the current and former GHOS members. ICBS included discussions on the best practices for evaluating the impact of post-crisis reforms, the role of proportionality in the Basel framework, and the importance of implementing the post-crisis reforms in a full, timely, and consistent manner. Participants also exchanged views on the supervisory challenges following the completion of Basel III, the implications of financial technology for banks and supervisors, and the importance of strengthening operational resilience, including cyber-resilience.
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Keywords: International, Banking, Basel III, Market Risk, Proportionality, Pillar 3, Disclosures, Leverage Ratio, BCBS
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