BCBS takes COVID-19 into focus

May 5, 2021 Benn-Ibler Rechtsanwälte

The Corona crisis has also presented the banking sector with great challenges. The Basel Committee on Banking Supervision addresses these challenges in its work programme for 2020-2021 and will make COVID-19 a core part of its focus. In addition, the Committee will deal with medium-term and emerging structural risks – for example, in the areas of digitalization and climate change. 

At the end of 2020, the national banks and supervisory authorities represented in the Committee agreed on priorities which have now been published in the two-year work programme of the Basel Committee on Banking Supervision.  

First, the Committee will address resilience and recovery measures in the banking sector. The stated aim is to continually monitor and assess risks and vulnerabilities to the global banking system. The Committee will issue recommendations to jurisdictions and supervisory committees if deemed necessary.

In parallel, the Committee will evaluate the „lessons learned“ from the COVID-19 crisis with regards to the implementation of the Basel III standards.

Secondly, the Committee will be concerned with analyzing and mitigating risks related to structural trends. Among these are the effects of digitalization on the financial sector and the ongoing disintermediation of banks as financial intermediaries, which impact banks’ business models and the banking sector more generally.

In addition, the Committee will closely observe climate-related financial risks and the effects of the long-lasting low interest rates.

The third theme of the Committee’s work programme concludes its activity and aims at strengthening the coordination and practices of supervisory authorities. In light of the advancing technologization, the Committee also aims at investigating what roles artificial intelligence and machine learning play in banking and supervision (technology in supervision, “suptech“)

The question of how banks use data and technology will also be addressed. This includes areas of operational resilience, in particular cyber security.

Basel Committee work programme and strategic priorities for 2021-22 (16. April 2021)