Wednesday, February 25, 2015

Basel Banking Supervision Committee Priorities for 2015-2016

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:

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.

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.

 

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.

 

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.

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