Tuesday, October 18, 2016
In an October 12, 2016 address before the European Parliament’s Committee on Economic and Monetary Affairs, William Coen, Secretary General of the Basel Committee (BIS) provided some insights into what BIS plans to do to finalize Basel III post-crisis reforms. Notably, Coen indicated that there may be some reexamination of certain aspects of the framework that may have missed their mark initially.
While Basel III was focused primarily on addressing leverage, excessive credit growth and liquidity risk, and capital and liquidity buffers, all identified as playing a role in the financial crisis, Mr. Coen said that the Basel Committee has taken a more reflective view on these post-crisis reforms. Coen indicated that the Committee’s review of the package of reforms, coupled with empirical evidence, “suggests that more can be done toward achieving a better balance between risk sensitivity, simplicity, and comparability. He noted that, in particular:
Consequently, in the short-term, BIS will focus on clarity, certainty, and simplicity as it rounds out its post-crisis reforms. According to Coen, the Committee's outstanding work on Basel III can be grouped into three broad categories:
Mr. Coen indicated that the Basel Committee intends to finalize all of these reforms by the end of the year.
The full text of Mr. Coen’s address is available via: http://www.bis.org/speeches/sp161012.htm