Wednesday, February 25, 2015
The Basel Committee on Banking Supervision has announced its planned areas of focus for 2015 and 2016 as it continues to propose and finalize the remaining elements of its Basel III regulatory reform agenda. The Committee will continue to pursue its post-crisis reform agenda, but will now look toward restoring confidence in capital ratios, ensuring consistency across the regulatory framework, monitoring and assessing the implementation of the framework, and improving the overall effectiveness of supervision.
The Basel Committee agenda for 2015 and 2016 is structured around four themes:
1. Policy development.
In addition to existing policy initiatives, there are three policy-related issues which the Committee is undertaking
assessing the interaction, coherence and overall calibration of the reform policies;
reviewing the regulatory treatment of sovereign risk; and
assessing the role of stress testing in the regulatory framework, in light of national developments.
2. Ensuring an adequate balance between simplicity, comparability and risk sensitivity across the regulatory framework.
Now that the major elements of the reform agenda have been agreed, the Committee will assess the interaction, coherence and overall calibration of the reform policies. The aim of the Committee's work on coherence is to consider how the various regulatory metrics interact and whether the calibration and design of the various elements of the framework are consistent with their intended objectives.
3. Monitoring and assessing implementation of the Basel framework.
The Committee will continue to monitor and assess its members' implementation of the Basel framework. The Regulatory Consistency Assessment Programme (RCAP) is the means by which the Committee evaluates member jurisdiction's adoption of its standards. The RCAP will be expanded to also cover Basel III's liquidity standards and the frameworks for global and domestic systemically important banks.
4. Improving the effectiveness of supervision.
The Committee will continue its work on improving the effectiveness of supervision. In particular, the Committee will focus on supervisory practices related to stress testing, valuation practices and the role of Pillar 2 in the capital framework.