Bank for International Settlements – BIS’ Post

The BIS Innovation Hub is launching Project Raven. It aims to create a new solution to help authorities comprehensively assess the cyber security and resilience maturity readiness of their countries’ financial systems. Developed by the Innovation Hub’s Nordic Centre, the project will help central banks in their task of overseeing the cyber security and operational resilience frameworks of financial institutions and financial market infrastructures. In parallel, central banks and regulatory authorities must also assess their own practices and those of their critical service suppliers. Project Raven will enable central banks and regulatory authorities to use artificial intelligence to have fast and easy access to a range of complex information, standards and guidelines. The solution will also let them securely collect and analyse cyber security and resilience data, and enable efficiency through the intelligent completion of multiple reporting requirements and the reuse of data. The project’s name comes from Nordic mythology. The Norse god Odin sent his two ravens to fly around the world to gather information and report back to him. Read more: https://bit.ly/4blwjBL #AI #cyber #cybersecurity #Fintech

The Basel Committee on Banking Supervision is calling for comments on guidelines for counterparty credit risk (CCR) management. The new proposals will replace the Committee’s “Sound practices for banks’ interactions with highly leveraged institutions” published in January 1999. They are a supervisory response to the significant shortcomings that have been identified in banks’ management of CCR, including the lessons learned from recent episodes of non-bank financial intermediary (NBFI) distress. They include key practices critical to resolving long-standing industry weaknesses in CCR management and are designed to be broadly applicable to manage banks’ CCR exposures to all types of counterparties. The greatest potential benefits of the new guidelines are expected to be in cases where banks have high-risk exposures to counterparties, including NBFIs. To read the guidelines and comment, look here https://lnkd.in/eq67sVGy #BaselCommittee #BaselIII

Properly designed service level agreements (SLAs) can help in meeting the G20 targets for cheaper, faster, more transparent and more accessible cross-border payments, while also ensuring their safety. The G20 has identified cross-border payment SLAs as a priority in helping to achieve its targets by end-2027. The BIS Committee on Payments and Market Infrastructures (CPMI) has published a set of high-level recommendations, key features and guiding questions to inform parties involved in SLAs used in cross-border payment arrangements. The recommendations, which were informed by a year-long interaction with public and private stakeholders, are deliberately kept at a high level. They should not put an undue burden on new and smaller payment arrangements, while still contributing to increased harmonisation of new and existing agreements. Governance entities, participants and overseers of new or existing cross-border payment arrangements are encouraged to consider the recommendations. The findings of this report will inform the CPMI’s ongoing work on governance and oversight of fast payment system interlinking arrangements. They will also feed into its ongoing exchange with industry stakeholders, such as the cross-border payments interoperability and extension task force. Read the report here https://lnkd.in/e5Wy2kjk #CrossBorderPayments

The Basel Committee on Banking Supervision today published the Committee’s revised Core principles for effective banking supervision, the global standard for sound prudential regulation and supervision of banks and banking systems. The revised standard was endorsed at the 23rd International Conference of Banking Supervisors (ICBS), where more than 220 central bankers and banking supervisors representing more than 90 jurisdictions gathered to mark the 50th anniversary of the Committee. The Core Principles are universally applicable and accommodate a range of banking systems and a broad spectrum of banks. They are used by supervisors to assess the effectiveness of their regulatory and supervisory frameworks. ICBS delegates reaffirmed the importance of effective supervision and bank risk management practices and committed to fully implementing the revised standard. Speaking at the ICBS, Pablo Hernández de Cos, Chair of the Basel Committee and Governor of the Banco de España, said, “Participants also acknowledged the benefits of the Committee’s Basel III standards and the importance of member jurisdictions implementing them in full and consistently, and as soon as possible. More generally, the ICBS highlighted the ongoing commitment for cross-border cooperation in a world where banks are highly interconnected in the global financial system.” Preceding the ICBS, the Basel Committee met on 23 April and approved for publication a consultation paper on guidelines for banks’ counterparty credit risk management and an analytical report on the digitalisation of finance. Further details here: https://lnkd.in/exkjwZrc #BaselCommittee #BaselIII

The BIS and the Banco Central do Brasil today launched the fifth edition of the G20 TechSprint Initiative, with a focus on developing solutions for sustainable finance to support the United Nations’ Sustainable Development Goals (SDGs). The G20 TechSprint is an international competition to explore innovation and develop cutting-edge technological solutions. It is open to participants from around the world. These are the three problem statements for this year’s competition: - Nature-based solutions: technology solutions that incentivise and attract sustainable and inclusive investments targeted at biodiversity and nature preservation. - ESG: new technologies to improve the quality, reliability and granularity of environmental, social and governance (ESG) data to facilitate due diligence, disclosure and management of ESG-associated risks and opportunities by large corporates and small and medium-sized enterprises, investors and financial institutions, and/or regulators and supervisors. - SDGs: open source solutions to support financial decisions and capital allocation aligned with the SDG goals, including preserving biodiversity, climate change, clean energy, financial education and inclusion, and poverty alleviation. Read more: https://bit.ly/3UwR07X

The BIS and the Banco Central do Brasil today launched the fifth edition of the G20 TechSprint Initiative, with a focus on developing solutions for sustainable finance to support the United Nations’ Sustainable Development Goals (SDGs). The G20 TechSprint is an international competition to explore innovation and develop cutting-edge technological solutions. It is open to participants from around the world. These are the three problem statements for this year’s competition: - Nature-based solutions: technology solutions that incentivize and attract sustainable and inclusive investments targeted at biodiversity and nature preservation. - ESG: new technologies to improve the quality, reliability and granularity of ESG data to facilitate due diligence, disclosure and management of ESG associated risks and opportunities by large corporates and small and medium-sized enterprises, investors and financial institutions, and/or regulators and supervisors. - SDGs: open source solutions to support financial decisions and capital allocation aligned with the SDG goals, including preserving biodiversity, climate change, clean energy, financial education and inclusion, poverty alleviation, etc. Read more: https://bit.ly/3UwR07X

Over 200 central bankers and banking supervisors from more than 90 jurisdictions gathered in Basel today for a special edition of the International Conference of Banking Supervisors. It was great to welcome so many special guests, including several current and former policymakers, to mark the 50th anniversary of the Basel Committee on Banking Supervision. Basel Committee Chair Pablo Hernández de Cos and our General Manager Agustín Carstens reiterated the importance of the full and consistent implementation of the Basel III standards to help ensure a safer and more integrated global financial system. It is critical that the Basel Committee resists pressure to dilute its principles and continues to strengthen cross-border cooperation, especially at a time of intensifying geopolitical tensions, Mr Hernández de Cos said at the opening of the event, held every two years. “We owe it to our citizens to push back against the chorus calling for a watering down of our standards or advocating regulatory fragmentation. The costs of banking crises on our societies are simply too large and profound for us to fade away from cooperation.” Read the full speech here https://lnkd.in/dGBCJZNr Speaking at the end of the day’s proceedings, Mr Carstens stressed the need to maintain momentum in addressing threats to financial stability. “In addition, the Committee should remain ambitious and develop further guidance on emerging regulatory and supervisory issues and challenges such as those stemming from the recent banking turmoil or from climate developments,” he said. He also warned of the lack of progress in addressing the risks posed by non-bank financial institutions and noted that central banks and supervisors should consider the opportunities and risks presented by digitalisation and technological innovation for their own activities. Read the full speech here https://lnkd.in/dU2SmYHq Watch our explainer videos about the Basel Committee here: https://lnkd.in/esnyujuQ Watch the videos of the sessions here: https://lnkd.in/dtbK4a-Y Read more about the Basel Committee at https://lnkd.in/dRejbQXf #BaselCommittee #BaselIII

Generative artificial intelligence (gen AI) is poised to affect everyday lives profoundly. Millions are already exploring gen AI to create text, music and videos, and a growing number of firms in all sectors are integrating gen AI tools into their business operations. Despite the remarkable speed of adoption, little is known about consumers’ uses of and attitudes towards gen AI. Furthermore, the level of trust households place on decisions made by gen AI remains unclear. In a new BIS Bulletin, Iñaki Aldasoro, Olivier Armantier, Sebastian Doerr, Leonardo Gambacorta and Tommaso Oliviero explore the results from a representative survey of US households to shed light on these issues. Almost half of US households have used gen AI tools. Yet the use of and knowledge about gen AI are significantly lower among women, the elderly and households with lower income or educational attainment. These patterns echo broader findings on a gender gap in the use of (financial) technology, as well the “digital divide” that could stem from the elderly’s limited perceived benefits of new technology. No area has attracted more attention than the potential effects of AI on jobs. On average, US households are generally positive about the impact of AI on their job prospects, although this varies by demographic group (men, younger, higher education and higher income groups are more optimistic). That said, all groups trust gen AI less than humans, especially in providing financial and medical services. Survey participants express concern over the risks of data breaches and data abuse. They overwhelmingly support the regulation of AI. Consistent with previous surveys, respondents trust government agencies and financial institutions more than big techs to safeguard their data when using gen AI. https://lnkd.in/e4rFJZNk The findings from this Bulletin help inform the debate on the implications of the rise of gen AI for labour markets and inequality, as well as for data privacy regulation. #GenAI #BISBulletin

The Basel Committee on Banking Supervision is 50! Why was it set up, what does it do, and how is it working for a safer and more resilient banking system? “Basel III - building a resilient banking system” – the final video in a series of four explainers, looks at the genesis and workings of the Basel Framework, particularly the Basel III reforms. It also describes how additional standards improved the regulatory framework with the aim of restoring the credibility and comparability of banks’ risk-based capital ratios. The video highlights the need for a full and consistent implementation of the Basel III standards to ensure their benefits for global financial stability are realised. Learn more here https://lnkd.in/esnyujuQ #BaselCommittee #BaselIII