The Basel Committee on Banking Supervision (BCBS) has updated its 2002 supervisory guidance on dealing with weak banks. Key changes include:

  • emphasising the need for early intervention and the use of recovery and resolution tools, and updating supervisory communication policies for distressed banks;
  • providing further guidance for improving supervisory processes, such as incorporating macro-prudential assessments, stress testing and business model analysis, and reinforcing the importance of sound corporate governance at banks;
  • highlighting the issues of liquidity shortfalls, excessive risk concentrations, misaligned compensation and inadequate risk management; and
  • expanding guidelines for information-sharing and cooperation among relevant authorities.

View Guidelines for identifying and dealing with weak banks released by the Basel Committee, 16 July 2015