On 29 February 2024, the Basel Committee on Banking Supervision (Basel Committee) announced it had approved revisions to the Core Principles for Effective Banking Supervision. The final standard, which follows an earlier consultation, will be published following the International Conference of Banking Supervisors on 24-25 April 2024.

The Basel Committee has also announced that it will consult on potential measures to address window-dressing behaviour by some banks in the context of the framework for global systemically important banks (G-SIBs). The consultation paper, and an accompanying working paper will be published next month. The Basel Committee will also publish a working paper on an assessment of the G-SIB score dynamics over the past decade.

As per the European Central Bank, ‘window dressing’ refers to the practice of financial intermediaries to engineer a contraction of their balance sheets at regulatory reporting dates so as to report more favourable regulatory metrics, and ultimately save funding costs. The Basel Committee refers to a previous statement in which it warned that window dressing undermines the intended policy objectives of the leverage ratio requirement and risks disrupting the operations of financial markets.

As part of its holistic approach to addressing climate-related financial risks, the Basel Committee will publish a discussion paper on the use of climate scenario analysis by banks and supervisors to help inform potential future work in this area. The discussion paper will be published in the coming months.

The Basel Committee has also reaffirmed its expectation that all aspects of Basel III will be implemented in full, consistently and as soon as possible. Basel Committee members have also approved a workplan for the jurisdictional assessments of the implementation of these standards as part of the Committee’s Regulatory Consistency Assessment Programme.