Basel Committee Oversight Body Focuses on Learnings from Banking Turmoil

The Group of Central Bank Governors and Heads of Supervision (GHOS), which oversees the Basel Committee on Banking Supervision, met in September to discuss lessons learned from recent banking challenges and review the implementation status of outstanding Basel III standards.

The Spring’s individual bank failures and turmoil resulted in Basel Committee initiatives such as strengthening supervisory effectiveness, pursuing additional analytical work, and assessing the need to explore policy options. GHOS endorsed Basel Committee’s response to the events this Spring.  

The GHOS will be publishing the Basel Committee’s regulatory and supervisory lessons learned from the recent stress in the financial services industry. They include:

  • The banks’ risk management practice and governance arrangements are the most important foundation to operational resilience.
  • Strong supervision plays a vital role in overseeing the safety and soundness of banks. Effective supervision must act early to identify weaknesses in bank practices.
  • The importance of a prudent regulatory framework in safeguarding financial stability.

The GHOS is supporting a series of follow up initiatives. They include strengthening supervisory effectiveness and identifying issues that could merit additional guidance at a global level and follow-up analytical work to determine if components of the Basel Framework are performing as intended.

The GHOS noted that members continue to make progress in implementing the Basel III reforms, which were finalized 2017.  All remaining jurisdictions and standards of Basel III are expected to be implemented by the end of 2025.

Additional information can be found here.