The Bank for International Settlements (BIS) on 25th April, released the ‘Core Principles for Effective Banking Supervision’ which is crucial for global banking supervision. The revised text has been incorporated into the consolidated Basel Framework.
- BIS aids central banks in their pursuit of monetary and financial stability through international cooperation and includes 63 member-countries, including the Reserve Bank of India (RBI).
Key points
- The ‘Core Principles for Effective Banking Supervision’ will serve as a guiding framework for central banks supervising banks in over 90 jurisdictions.
- This set of principles garners broader acceptance beyond the BIS membership, reflecting its global influence.
- The revised ‘Core Principles’ incorporate global banking experiences to enhance the original 29 principles, establishing them as the de facto minimum standards for prudent bank regulation and supervision.
- These principles include the acknowledgement of “climate-related financial risks”, the importance of a bank’s business model being analysed by the regulator to evaluate forward-looking strategies, and the addition of “operational resilience” to address risks from digitalisation and non-bank financial intermediation.
About Bank for International Settlements (BIS)
- Established in 1930, the BIS is owned by 63 central banks, representing countries from around the world that together account for about 95% of world GDP.
- Its head office is in Basel, Switzerland and it has two representative offices: in Hong Kong SAR and in Mexico City.
- Since its inception in 1930, the BIS has never had an Asian as its General Manager, and its Board of Directors includes central bank governors with ex-officio status for the US, UK, Germany, France, Italy and Belgium.
Sources: Business Line and BIS
