The Basel Committee on Banking Supervision has issued a public consultation on revisions to the core principles for effective banking supervision.
The core principles are the de facto minimum standards for the sound prudential regulation and supervision of banks and banking systems. They are universally applicable and accommodate a range of banking systems and a broad spectrum of banks. The core principles are used by supervisors to assess the effectiveness of their regulatory and supervisory frameworks. They are also used by the International Monetary Fund (IMF) and World Bank as part of the Financial Sector Assessment Program (FSAP) to evaluate the effectiveness of countries’ banking supervisory systems and practices.
The core principles were last substantively updated in 2012. The committee commenced a review of the core principles in April 2022, with the objective of reflecting on supervisory and regulatory developments, structural changes affecting the banking system, and lessons learnt from FSAPs since the last update. The current review has been informed by several thematic topics reflecting developments in financial risks, operational resilience, systemic risk and macroprudential aspects of supervision, new risks, including climate-related financial risks and the digitalization of finance, non-bank financial intermediation, and risk management practices.
The proposals were developed by a task force comprised of both Committee and non-Committee member jurisdictions, as well as the IMF and World Bank.