On 7 June 2023, the Bank for International Settlements (BIS) issued a press release concerning the meeting that the Basel Committee on Banking Supervision (Basel Committee) had on 6 June 2023. At this meeting the Basel Committee took stock of recent market developments and risks to the global banking system. It also discussed various policy initiatives.
When discussing the outlook for the global banking system in light of recent economic and financial market developments Basel Committee members agreed that:
- The first and most important source of financial and operational resilience comes from banks’ own risk management practices and governance arrangements.
- It is critical that supervisors have the ability and willingness to act early and effectively to identify and promptly correct weaknesses in bank practices.
- The Basel reforms that have been implemented to date helped shield the global banking system and real economy from a more severe banking crisis. Basel Committee members unanimously reaffirmed their expectation of implementing all aspects of the Basel III framework in a full and consistent manner, and as soon as possible, in order to further enhance the resilience of the global banking system.
In terms of policy initiatives the press release notes that the Basel Committee:
- Agreed to consult on revisions to the Core Principles for Effective Banking Supervision. A consultation paper will be published next month.
- Assessed certain outstanding elements of the prudential treatment of banks’ exposures to cryptoassets.
- Took stock of the work concerning the development of a Pillar 3 framework requiring disclosure of bank exposures to climate-related financial risks. The Basel Committee agreed to issue a consultation paper on the proposed framework by the end of this year.