Basel Committee Advances Supervisory and Regulatory Agenda

The Basel Committee on Banking Supervision (BCBS) met in Indonesia last week to discuss risks to the global banking system and to advance its supervisory and regulatory agenda.

Chair Erik Thedéen said the meeting allowed members to discuss “risks and vulnerabilities to the global banking system,” take stock of modernization efforts, and consider the Committee’s future work program. He said the aim is to ensure the BCBS remains “results-oriented, relevant and responsive” as the banking system evolves.

On AI, the Committee said the financial footprint of the AI ecosystem is “expanding rapidly,” alongside “greater use of leverage and increasingly interconnected financing arrangements.” It agreed to review existing operational-risk loss categories with a focus on cyber risk and AI developments, while continuing to assess the supervisory implications of AI. The Committee also approved a final standard for machine-readable Pillar 3 disclosures, noting that most banks currently publish such information only in PDF format, making cross-bank aggregation and comparison more difficult.

The BCBS approved the results of its end-2025 assessment of global systemically important banks (G-SIBs) ahead of the Financial Stability Board’s 2026 list, as well as revisions intended “to reduce window-dressing behaviour.” It also agreed to consult on additional supervisory guidance on interest rate risk in the banking book after identifying shortcomings in banks’ risk management, and expects to provide an update on its review of the prudential treatment of banks’ cryptoasset exposures by year-end.

Other work includes assessing targeted updates to the Committee’s 2008 liquidity risk principles, publishing findings from an AML/CFT survey across 19 jurisdictions, and releasing assessments of leverage ratio implementation in Australia, Canada, Japan, Korea, Switzerland, and the United Kingdom.