At its recent meeting, the Basel Committee on Banking Supervision (BCBS) advanced efforts to strengthen supervisory effectiveness based on the lessons learned from the 2023 banking turmoil.
The Committee took stock of its work to develop practical tools to support supervisors in their day-to-day activities. In particular, the BCBS is focused on the supervision of liquidity and interest rate risks, the assessment of business model sustainability, and the importance of effective supervisory judgment. The Committee will publish an update on this work by mid-2025.
In an In Focus article from our 2024 Compendium, Neil Esho, Secretary General of the BCBS, called for supervisory agencies to ensure their culture is forward-looking, proactive, and outcomes-focused to support more effective supervision.
"Thinking about how best to achieve sound supervisory outcomes has received increasing attention from a number of supervisory agencies in recent years," Esho wrote. "Good supervisory outcomes are largely influenced by risk culture, particularly factors such as willingness to act, persistence, and intelligent risk-taking. These intangible qualities are pivotal in enhancing supervisors’ ability to promote safety and soundness of banks and the banking system." ▸ Read More
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