Basel Committee on Banking Supervision
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The Basel Committee on Banking Supervision (BCBS) is an international committee of banking supervisory authorities that sets global standards and guidelines for the regulation, supervision, and risk management of the banking sector. It operates under the auspices of the Bank for International Settlements and comprises representatives from central banks and regulatory authorities from different countries.
Developing Basel Accords: The BCBS is responsible for developing and updating the Basel Accords, which are global regulatory standards for the banking sector. The most significant accords are Basel I, Basel II, and Basel III. These accords establish guidelines for capital adequacy, risk management, and liquidity requirements that banks should adhere to.
Capital adequacy framework: The BCBS sets guidelines for capital adequacy requirements, which determine the minimum amount of capital that banks must maintain in relation to their risk exposures. The Basel Accords introduce risk-based capital requirements, taking into account credit risk, market risk, and operational risk.
Risk management and supervision: The BCBS promotes sound risk management practices within banks. It establishes guidelines for risk measurement, assessment, and management, including credit risk, market risk, and operational risk. The committee also encourages effective supervisory practices to ensure banks' compliance with risk management standards.
Addressing systemic risks: The BCBS addresses systemic risks in the banking sector and promotes financial stability. It develops guidelines to identify and manage systemically important banks, including the adoption of additional capital buffers and enhanced supervisory requirements.
International cooperation: The BCBS fosters international cooperation and coordination among banking supervisory authorities. It facilitates the exchange of information and best practices, promotes consistent implementation of banking regulations across jurisdictions, and collaborates with other international organisations and committees.
Monitoring and assessment: The BCBS monitors the implementation and effectiveness of its standards and guidelines across member jurisdictions. It conducts peer reviews, assessments, and impact studies to evaluate the consistency and impact of its regulatory frameworks.
The BCBS plays a significant role in promoting financial stability, enhancing the resilience of the banking sector, and ensuring a level playing field for banks globally. Its standards and guidelines are widely adopted and influence banking regulations and supervision in many countries around the world.
Developing Basel Accords: The BCBS is responsible for developing and updating the Basel Accords, which are global regulatory standards for the banking sector. The most significant accords are Basel I, Basel II, and Basel III. These accords establish guidelines for capital adequacy, risk management, and liquidity requirements that banks should adhere to.
Capital adequacy framework: The BCBS sets guidelines for capital adequacy requirements, which determine the minimum amount of capital that banks must maintain in relation to their risk exposures. The Basel Accords introduce risk-based capital requirements, taking into account credit risk, market risk, and operational risk.
Risk management and supervision: The BCBS promotes sound risk management practices within banks. It establishes guidelines for risk measurement, assessment, and management, including credit risk, market risk, and operational risk. The committee also encourages effective supervisory practices to ensure banks' compliance with risk management standards.
Addressing systemic risks: The BCBS addresses systemic risks in the banking sector and promotes financial stability. It develops guidelines to identify and manage systemically important banks, including the adoption of additional capital buffers and enhanced supervisory requirements.
International cooperation: The BCBS fosters international cooperation and coordination among banking supervisory authorities. It facilitates the exchange of information and best practices, promotes consistent implementation of banking regulations across jurisdictions, and collaborates with other international organisations and committees.
Monitoring and assessment: The BCBS monitors the implementation and effectiveness of its standards and guidelines across member jurisdictions. It conducts peer reviews, assessments, and impact studies to evaluate the consistency and impact of its regulatory frameworks.
The BCBS plays a significant role in promoting financial stability, enhancing the resilience of the banking sector, and ensuring a level playing field for banks globally. Its standards and guidelines are widely adopted and influence banking regulations and supervision in many countries around the world.
