Basel Committee outlines supervision strategy
Basel Committee's work to address fundamental weakness in regulation and supervision is advanced, says chairman Nout Wellink
The key building blocks of the Committee's strategy include working to strengthen the risk capture of the Basel II framework (in particular for trading book and off-balance-sheet exposures); enhancing the quality of Tier I capital; building additional shock absorbers into the capital framework that can be drawn upon during periods of stress and to dampen procyclicality; introducing measures to help contain leverage in the banking system; strengthening supervisory frameworks to assess funding liquidity at cross-border banks; leveraging Basel II to strengthen risk management and governance practices at banks; strengthening counterparty credit risk capital, risk management and disclosure; and promoting globally co-ordinated supervisory follow-up exercises to ensure implementation of supervisory and industry-sound principles.
Nout Wellink, chairman of the Basel Committee, says: "The Basel Committee's work programme is well advanced and provides practical responses to the financial stability concerns raised by policy-makers related to the banking sector." The Basel Committee expects to issue proposals on a number of these topics for public consultation in early 2009.
Wellink adds: "The primary objective of the Committee's strategy is to strengthen capital buffers and help contain leverage in the banking system arising from both on- and off-balance-sheet activities." It will also promote stronger risk management and governance practices to limit risk concentrations at banks. "Ultimately, our goal is to help ensure the banking sector serves its traditional role as a shock absorber to the financial system, rather than an amplifier of risk between the financial sector and the real economy," he says.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Managing risk to accelerate agentic AI value creation
Banks can accelerate agentic AI adoption by aligning each use case’s risks, controls and capabilities, enabling safe, accountable and value-driven deployment
One legal entity. Multiple IDs. Three business risks.
How fragmented entity IDs undermine risk, compliance and revenue decisions
An agentic bank? Not so fast
With no clear definition or way to gauge ROI, claims of AI adoption should be taken with a pinch of salt
BIS’s Hernández de Cos on AI, non-bank risk and tokenisation
General manager talks about how the BIS is navigating a complex global environment
For enterprise risk, influence runs deeper than any veto
Risk Benchmarking study finds formal veto rights concentrated among the largest lenders, but used only as a last resort
Intraday pricing: fixed income’s next frontier
With firms looking to price fixed income securities on an intraday basis, specialist pricing providers such as LSEG help address cost, complexity and time-to-market challenges
Tech and data fragmentation irks enterprise risk managers
Risk Benchmarking: Often at the mercy of decisions made by other parts of the bank, ERM heads gripe at disparate systems, poor UX and reporting gaps
At bigger banks, enterprise risk owns scenario frameworks
Risk Benchmarking research finds ERM teams tasked with providing effective challenge on scenario construction across risk silos