Bank for International Settlements – BIS

The Basel Committee on Banking Supervision has issued a range of practices report on implementing a positive neutral countercyclical capital buffer (CCyB). An increasing number of jurisdictions are choosing a flexible approach to voluntarily introduce a positive neutral CCyB, ie a non-zero CCyB, when risks are judged to be neither subdued nor elevated. In 2022, the Committee published a newsletter in which it supported and acknowledged the benefits of authorities’ ability to set a positive neutral rate for the CCyB. Today’s report builds on prior Committee publications by examining the observed range of practices adopted by jurisdictions which have chosen to implement a positive neutral CCyB. Authorities that have introduced a positive neutral CCyB have found it helpful for banks in their jurisdictions to have buffers of capital in place that can be released in the event of sudden shocks, including those unrelated to the credit cycle, such as the Covid-19 pandemic. The adoption of a positive neutral CCyB approach is not required by Committee members, and the report does not seek to discuss or opine on the merits or demerits of a positive neutral CCyB relative to other macroprudential measures or tools. Some jurisdictions may use tools other than the positive neutral CCyB to address similar risks, based on their specific jurisdictional circumstances. Read the full report here https://lnkd.in/e_k2zS5K #BaselCommittee

Congratulations to the winners of the G20 TechSprint 2024, the global hackathon hosted by the BIS Innovation Hub and the Banco Central do Brasil to seek out technological innovations to address common challenges and priorities of the global regulatory and central bank community. Three teams representing different problem statements addressing sustainable finance challenges connected to the United Nations Sustainable Development Goals (SDGs) picked up their awards at a ceremony in Brasília. Well done to teams Ekonavi, Tese and Kaleidofin Private Limited as well as the 15 finalists selected from 110 proposals from around the world for finding solutions to stimulate the adoption of nature-based solutions, enhance environmental, social and governance (ESG) reporting and to accelerate progress towards the SDGs. These solutions can go a long way to preserve biodiversity, better manage ESG risks and align capital allocation more closely with sustainability efforts, to promote the green transition while preserving financial stability. The BIS Innovation Hub is thrilled to conclude this fifth edition of the G20 TechSprint and to have worked so closely with the Central Bank of Brazil and supporting partners including the Inter-American Development Bank, its innovation and venture capital arm IDB Lab, as well as the National Federation of Central Bank Employees Associations, FENASBAC. Find out more: https://lnkd.in/e8aMqiHu

The Basel Committee on Banking Supervision today published further information related to its 2024 assessment of global systemically important banks (G-SIBs), with additional details to help readers understand the scoring methodology. The publication accompanies the Financial Stability Board (FSB) release of the updated list of G SIBs and includes: ? the denominators of the high-level indicators used to calculate banks’ scores; ? the high-level indicators for each bank in the sample used to calculate these denominators; and ? the cut-off score used to identify the G-SIBs in the updated list and the thresholds used to allocate G-SIBs to buckets for the purpose of calculating the higher loss absorbency requirements. The Committee’s methodology assesses the systemic importance of global banks using indicators calculated from data for the previous fiscal year-end (2023) supplied by banks and validated by national authorities. The final scores are mapped to corresponding buckets that determine the higher loss-absorbency requirement for each G-SIB. The Basel Committee has also updated its interactive dashboard. Further details here: https://lnkd.in/e7kzNTbv #GSIB #BaselCommittee

The BIS Committee on Payments and Market Infrastructures (CPMI), through its payments interoperability and extension (PIE) taskforce, is seeking input from industry and other external parties on how to best enhance cross-border payments. Relevant private sector stakeholders are invited to send their comments on one or more of the following consultation questions to the CPMI secretariat: ? Which private sector initiatives or solutions could help to support enhancing cross-border payments? ? What frictions or challenges do you think have not been sufficiently dealt with in the G20 cross-border payments programme? ? What do you see as priorities to achieve safer and more efficient cross-border payments? Contributions should be e-mailed to [email protected] with “PIE taskforce consultation” in the subject line by 20 January 2025. Relevant responses will be shared with the CPMI, and its workstreams including the PIE taskforce and may be published on the BIS website. Responses will feed into the CPMI work on cross-border payments and may be considered by the PIE taskforce and other CPMI workstreams in their discussions and reports. Read more here https://lnkd.in/dfBytKhn

"Claudio Borio has profoundly influenced thinking about the appropriate role, conduct, and objectives of monetary and prudential policy, not only within the BIS but also among the economics profession more generally,” said Agustín Carstens at a farewell colloquium honouring the head of the Monetary and Economic Department for his more than 35 years of service at the BIS. Mr. Borio will retire on 31 December 2024. The colloquium was attended by current and former central bankers, academics and BIS staff, and covered topics that have been central to the public face of Mr Borio’s career as a researcher and policy advisor: the evolution of the BIS and central banking in recent decades, financial stability and regulation, and the conduct of monetary policy. Speakers recounted how he significantly shaped the thinking, work style, and culture of economics at the BIS and agreed that his contributions have been a true public good. We thank everyone who joined us in honouring his rich legacy!

????The world is not on track to limit global average temperature increase within the Paris Agreement targets. Climate finance is crucial to accelerate the orderly transition to net zero. Financial institutions can support this effort, underpinned by sound regulatory frameworks. In the latest FSI Occasional Paper, Joseph Noss, Vera Songwe and Jeffery Yong explore banks’ involvement in climate finance, the risks associated with these activities and the potential prudential treatment of climate finance. They describe how the risks may vary depending on possible future transition paths – the so-called Green Winter, Green Acceleration and Green Goldilocks scenarios. Find out more here: https://lnkd.in/eTGjnuXY #ClimateFinance #BankingRegulation #FinancialStabilityInstitute

Join the BIS Innovation Hub’s 2025 Analytics Challenge! We invite interested parties to compete to develop innovative solutions to combat financial crime and enhance the integrity of the evolving global financial system. New technologies can enable collaborative solutions to this global issue. They can help institutions identify illicit behaviour at a lower cost and while protecting user privacy. The BIS Innovation Hub has explored some of these solutions through projects Mandala, Hertha and Aurora. Through these initiatives, we have started to develop components that could be used for a global financial integrity technology stack. We now want to invite further input and ideas from the global community. We are seeking applications from private and public sector entities as well as academic researchers. The shortlisted solutions will be presented at the BIS Innovation Hub’s Analytics Showcase in London on 27-28 March to an audience of senior leaders from central banks, public sector organisations and financial institutions. To participate, click here https://lnkd.in/eqZmxg5U

??? New episode of the BISness podcast released! Featuring the closing panel discussion from the Green Swan Conference, this session brought together prominent central bank leaders. Chaired by BIS Deputy General Manager Andrea M Maechler, the panel saw Bank of Japan Governor Kazuo Ueda, Banque de France Governor Fran?ois Villeroy de Galhau, Banco de Espa?a Governor José Luis Escrivá, and European Central Bank President Christine Lagarde discuss the role central banks play in climate change-related topics. In this episode, the panellists explore how climate change, both in terms of physical risks and the transition, impacts the supply side of the economy. They also discuss the potential implications of these climate-related changes for the core mandates of central banks, particularly with respect to price stability. Tune in to experience this high-level discussion and understand the evolving responsibilities of central banks in the face of climate change. Check out the podcast on Spotify, Apple Podcasts, your favourite podcast platform or the BIS website: https://bit.ly/3AKcSpA #GreenSwanConference #ClimateChange #CentralBanking #BISnessPodcast

Recent bank failures have underscored the increasing relevance of commercial banks’ liquidity risk and suggested a structural reduction in deposit stability in weak banks. In his opening remarks at the XXIII Annual Conference on Risks at the Club de Gestión de Riegos in Madrid, Fernando Restoy Lozano, Chair of the Financial Stability Institute, noted that this calls for a commensurate evolution in the relevant policy framework. He suggested that authorities focus not on advocating for sweeping changes to regulatory and deposit insurance frameworks, but on ensuring consistent application of the agreed international standards to all systemically important banks, bolstering banking supervision, enhancing emergency liquidity arrangements and ensuring banks are operationally prepared to access necessary liquidity facilities. #FinancialStabilityInstitute #BankFailures #BankResolution #BankingSupervision Read more at: https://lnkd.in/e-4s57AV

Today marks the conclusion of the workshop on fostering financial inclusion through open finance, jointly organised by the BIS’s Financial Stability Institute, CGAP and the The World Bank. The workshop covered topics including: ? Designing open finance regimes ? Developing country roadmaps for open finance ? Governance and public-private cooperation ? Inclusive digital infrastructure ? Consumer protection and data protection ? Future innovations in open finance At the workshop, the "Key considerations for open finance" were launched. The publication presents key considerations for public authorities looking to design an effective and inclusive open finance framework that champions responsible financial inclusion and benefits all parties involved, particularly those traditionally excluded and underserved. Find out more and watch a video about the workshop and the Key Considerations here: https://lnkd.in/e7Cx_DXe #OpenFinance #FinancialInclusion #Innovation #FinancialStabilityInstitute