The Basel Committee has released a consultation paper on proposed changes to its core principles for effective banking supervision.
In April 2022, the Basel Committee on Banking Supervision (BCBS) initiated a review of this set of core principles, which have been in place since 2007 and last updated in April 2012.
These core principles are employed by financial regulators to evaluate the effectiveness of their supervisory frameworks and by multilateral financial institutions such as the International Monetary Fund and World Bank, as part of the Financial Sector Assessment Program (FSAP), to assess the performance of national-level and supranational supervisory frameworks and practices.
The review aims to take into account structural changes affecting the global banking system, lessons learnt since the principles were last updated, and advances in regulatory best practice.
These revisions address changes in financial, operational and systemic risk, along with “new” risks which have become more prominent since 2012 such as climate-related financial risks and the digitisation of finance. These also reflect on risks impacting financial organisations that do not hold a banking licence or are not directly captured under the Basel capital adequacy regime.
Interested parties are asked to provide their feedback on revisions to the BCBS core principles by 6 October 2023.
