On May 27, 2022, the Basel Committee met to contend with matters related to climate related financial risks, cryptoassets, G-SIB assessment methodology, and risks and vulnerabilities in the global banking system. Notably, the Committee finalized principles for the effective management and supervision of climate-related financial risks. They finalized a principles-based approach to improve risk management and supervisory practices devised to mitigate risks associated with climate-related financial risks; and these principles were drafted to include proportional application based on a “diverse range of banking systems”.
The Committee further issued a consultation on “the prudential treatment of banks’ cryptoasset exposures” as a follow-up to its consultation released in 2021 on the ‘Prudential treatment of cryptoasset exposures’. The recently released consultation aims to aid in the continued development of a “global minimum prudential framework” to address risks related to cryptoassets. The Basel Committee also reviewed European Banking Union methodologies on cross-border exposures, as well as risk and vulnerabilities to the global banking system in light of the Ukraine conflict.
More information on the Basel Committee’s May 27th meeting is available here.