BCBS Consults on Consolidated Guidelines

Last week, the Basel Committee on Banking Supervision (BCBS) launched a consultation on a consolidated version of its guidelines and sound practices for banks and supervisors.

The new modular format reorganizes existing materials to improve accessibility, with “no intention to introduce new expectations.” The Committee has reduced the volume of its guidance by “approximately 75%,” producing a more “streamlined” and “evergreen” set of expectations across supervision, corporate governance, risk management, operational risk, and resilience.

The guidelines define effective supervision as that which promotes safety and soundness through prompt risk assessment, supervisory judgment, timely remediation, and a “will to act,” including early intervention “ahead of the curve.” The guidelines also state that governance quality is “probably the single most important element in the successful operation of a bank,” and that supervisors should assess a bank’s risk culture as part of the supervisory review process. The guidelines add that regulatory compliance alone “does not necessarily guarantee that risks are contained,” particularly where “underlying culture or behaviour remain unaddressed.”

Comments on the consolidated guidelines are due by June 26, 2026. The Committee intends to periodically review the guidelines as standards, supervisory practices, and the financial system evolve. 

In an In Focus contribution to our 2024 Compendium, Neil Esho, Secretary General of the BCBS, called for supervisory agencies to ensure their own cultures are 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