09/11/2023 | Press release | Distributed by Public on 09/11/2023 11:09
The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, met on 11 September to take stock of the lessons learnt from the recent banking turmoil and review the implementation status of outstanding Basel III standards.
The banking turmoil of March to May 2023 was the most significant system-wide banking stress since the Great Financial Crisis (GFC) in terms of scale and scope. The stress experienced by individual banks, while having largely distinct causes, triggered an assessment of the resilience of the broader banking system. Swift intervention by public authorities, along with the increased resilience of the global banking system since the GFC, mitigated the impact of the turmoil.
In response, the Committee completed a stocktake of the regulatory and supervisory lessons of the turmoil. The GHOS endorsed the Committee's stocktake, which underlined the following:
The GHOS agreed to publish the Committee's stocktake report.
The GHOS also discussed the implications of the turmoil for the Committee's work programme. It endorsed a series of follow-up initiatives, including:
The already implemented Basel III reforms helped shield the global banking system and real economy from a more severe banking crisis. These events once again underscored the importance of implementing the outstanding Basel III standards.
The GHOS took stock of the implementation status of the outstanding Basel III reforms, which were finalised in 2017. Members have continued to make good progress with implementation. Around a third of BCBS member jurisdictions have implemented all, or the majority of the standards, while two thirds plan to implement them by the end of 2024, and the remaining jurisdictions in 2025.
GHOS members unanimously reaffirmed their expectation of implementing all aspects of the Basel III framework in full, consistently, and as soon as possible. The GHOS tasked the Committee with continuing to monitor and assess the full and consistent implementation of Basel III.
Note to editors:
The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee has no formal supranational authority, and its decisions have no legal force. Rather, the Committee relies on its members' commitments to achieve its mandate. The Group of Central Bank Governors and Heads of Supervision is chaired by Tiff Macklem, Governor of the Bank of Canada. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain.
More information about the Basel Committee is available here.