The Basel Committee on Banking Supervision has recently published its work programme for 2021-22. The work programme sets out the strategic priorities for the Committee over the coming year and reflects the outcome of a recent strategic review by the Committee to ensure that it continues to effectively promote global financial stability and strengthen the regulation, supervision and risk management practices of banks worldwide.
The work programme, which was recently endorsed by the Group of Governors and Heads of Supervision (GHOS), the oversight body of the Committee, focuses on three key themes:
- Covid-19 resilience and recovery: As the pandemic and economic crisis continue to unfold, the Committee’s work related to Covid-19 will continue to form a core part of its work programme. This includes the ongoing monitoring and assessment of risks and vulnerabilities to the global banking system. Where deemed relevant, the Committee stands ready to deploy additional policy and/or supervisory measures to mitigate these risks.
- Horizon scanning and mitigation of medium-term risks and trends: The Committee will pursue a forward-looking approach to identifying, assessing and mitigating medium-term risks and structural trends to the banking system. This includes work related to the ongoing digitalisation of finance, climate-related financial risks, and the impact on banks’ business models resulting from a “low-for-long” interest rate environment.
- Strengthening supervisory coordination and practices: The Committee will pursue a range of initiatives aimed at strengthening supervisory coordination and practices, with a focus on the role of artificial intelligence / machine learning in banking and supervision, data and technology governance by banks, operational resilience, and the role of proportionality in bank regulation and supervision.
As previously agreed by the GHOS, the Committee has marked a clear end to the Basel III policy agenda. Going forward, the Committee’s Basel III-related work will focus on: (i) monitoring the full, timely and consistent implementation of these standards by its members; and (ii) completing an evidence-based evaluation of the effectiveness of these reforms.
The Committee will continue to cooperate closely with other global standard-setting bodies and international fora on cross-sectoral supervisory issues, including work related to cross-border payments, non-bank financial intermediation, benchmark rate transition and FX settlement risk.
Pablo Hernández de Cos, Chairman of the Basel Committee and Governor of the Bank of Spain stated, “The work programme of the Basel Committee for the coming year reflects the Committee’s forward-looking approach to assessing and mitigating emerging risks and vulnerabilities to the global banking system and a clear focus on strengthening supervisory coordination. It is critical that all member jurisdictions implement the outstanding Basel III standards in a full, timely and consistent manner. Our strategic priorities are ambitious and seek to ensure that the Committee continues to promote global financial stability and safeguard the safety and soundness of banks worldwide.”
Source: BIS
