Governors and Heads of Supervision commit to ongoing coordinated approach to mitigate Covid-19 risks to the global banking system and endorse future direction of Basel Committee work

The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, has today endorsed a coordinated approach to mitigating Covid-19 risks to the global banking system.

The global banking system entered the Covid-19 crisis with ample capital and liquidity, thanks to the Basel III reforms implemented after the Great Financial Crisis (GFC). A robust regulatory framework underpins confidence in banks’ soundness and helps to maintain a level playing field internationally.

The timely measures[1] pursued by the Committee at the start of the pandemic and the GHOS’s agreement[2] to revise the implementation timeline for outstanding Basel III standards added to the unprecedented range of fiscal and monetary support measures that have buttressed banks’ resilience thus far.

The Basel III capital and liquidity buffers help banks to absorb shocks and keep lending to creditworthy households and businesses. Using capital and liquidity resources in this way should take priority at present. GHOS members strongly support the Committee’s repeated[3] guidance 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.

As the Covid-19 crisis continues to unfold, the vulnerabilities and risks to the global banking system will evolve. Against that backdrop, 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:

  • an ongoing monitoring and assessment of vulnerabilities and risks to the global banking system from Covid-19, and 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; and,
  • where necessary and prudent, adopting additional global measures in a coordinated manner.

The GHOS members also unanimously reiterated their expectation for the full, timely and consistent implementation of all aspects of the Basel III framework. Doing so will help to lock in the benefits of these standards to ensure that banks can withstand future crises.

In this regard, the GHOS members agreed to mark, with the present agreement on the Basel III framework, a clear end to the post-GFC Basel III policy agenda. Any further potential adjustments to Basel III will be limited in nature and consistent with the Committee’s evaluation work. Henceforth, the Committee’s Basel III-related work will focus on (i) monitoring the implementation, timeliness and consistency of these standards through its Regulatory Consistency Assessment Programme[4]; and (ii) completing an evidence-based evaluation of the effectiveness of these reforms, also taking into consideration the lessons 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 Committee’s future work will focus on new and emerging topics including structural trends in the banking sector, the ongoing digitalisation of finance and climate-related financial risk.

Global cooperation and coordination among central banks and supervisory authorities has been key to maintaining global financial stability during the Covid-19 pandemic and beyond. We, as GHOS, affirmed today our commitment to preserving a global level playing field and to avoiding regulatory fragmentation.

François Villeroy de Galhau, Chairman of the GHOS and Governor of the Bank of France

Today’s decisions by GHOS will help further reinforce the ability of banks to absorb shocks and maintain lending to creditworthy households and businesses during the pandemic by providing further certainty regarding the usability of the Basel III capital and liquidity buffers. The Committee will continue to build on its long track record of collaboratively and constructively strengthening the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability.

Pablo Hernández de Cos, Chairman of the Basel Committee and Governor of the Bank of Spain


Note to editors: 

The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee has no formal supranational authority, and its decisions have no legal force. Rather, the Committee relies on its members’ commitments to achieve its mandate. The Group of Central Bank Governors and Heads of Supervision is chaired by François Villeroy de Galhau, Governor of the Bank of France. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain. 

More information about the Basel Committee is available here.[5]

References

  1. ^ measures (www.bis.org)
  2. ^ agreement (www.bis.org)
  3. ^ repeated (www.bis.org)
  4. ^ Regulatory Consistency Assessment Programme (www.bis.org)
  5. ^ here (www.bis.org)

Source URL: Read More
The public content above was dynamically discovered – by graded relevancy to this site’s keyword domain name. Such discovery was by systematic attempts to filter for “Creative Commons“ re-use licensing and/or by Press Release distributions. “Source URL” states the content’s owner and/or publisher. When possible, this site references the content above to generate its value-add, the dynamic sentimental analysis below, which allows us to research global sentiments across a multitude of topics related to this site’s specific keyword domain name. Additionally, when possible, this site references the content above to provide on-demand (multilingual) translations and/or to power its “Read Article to Me” feature, which reads the content aloud to visitors. Where applicable, this site also auto-generates a “References” section, which appends the content above by listing all mentioned links. Views expressed in the content above are solely those of the author(s). We do not endorse, offer to sell, promote, recommend, or, otherwise, make any statement about the content above. We reference the content above for your “reading” entertainment purposes only. Review “DMCA & Terms”, at the bottom of this site, for terms of your access and use as well as for applicable DMCA take-down request.

Acquire this Domain
You can acquire this site’s domain name! We have nurtured its online marketing value by systematically curating this site by the domain’s relevant keywords. Explore our content network – you can advertise on each or rent vs. buy the domain. [email protected] | Skype: TLDtraders | +1 (475) BUY-NAME (289 – 6263). Thousands search by this site’s exact keyword domain name! Most are sent here because search engines often love the keyword. This domain can be your 24/7 lead generator! If you own it, you could capture a large amount of online traffic for your niche. Stop wasting money on ads. Instead, buy this domain to gain a long-term marketing asset. If you can’t afford to buy then you can rent the domain.

About Us
We are Internet Investors, Developers, and Franchisers – operating a content network of several thousand sites while federating 100+ eCommerce and SaaS startups. With our proprietary “inverted incubation” model, we leverage a portfolio of $100M in valued domains to impact online trends, traffic, and transactions. We use robotic process automation, machine learning, and other proprietary approaches to power our content network. Contact us to learn how we can help you with your online marketing and/or site maintenance.

Share