- The Basel Committee's oversight body endorses its strategic priorities and work programme for 2021–22.
- The programme prioritises implementing agreed reforms, assessing emerging risks and vulnerabilities, and increasing supervisory cooperation.
- Global initiatives on non-bank financial intermediation were also discussed.
The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, has today endorsed the strategic priorities and work programme of the Committee for 2021–22.
Consistent with the previous GHOS agreement to mark a clear end to the Basel III policy agenda, the new work programme places high priority on the implementation and evaluation of previously agreed reforms, on assessing emerging risks and vulnerabilities, and increasing supervisory cooperation. The Committee will also keep monitoring the resilience of the global banking system as the Covid-19 pandemic continues to unfold, ensuring that banks contribute to the subsequent recovery sustainably. The work programme will be published in April.
GHOS members also took the opportunity to exchange views on various ongoing global initiatives on non-bank financial intermediation (NBFI). NBFI now accounts for almost half of the global financial system, and plays an increasing role in providing financing to the real economy. Banks and non-bank financial entities are interconnected through multiple channels. The safety and soundness of the NBFI sector is therefore important to the safety and soundness of the banking sector.
GHOS members agreed that NBFI initiatives should take a holistic approach, as followed by the Financial Stability Board, considering the need to improve the resilience of NBFI, to minimise systemic risk and to meet other market-related objectives. Such initiatives should also safeguard the resilience and agreed prudential standards of the global banking system, which have been a critical support in the management of the Covid-19 crisis. In the meantime, bank supervisors should continue to monitor NBFI developments in order to better gauge the range of direct and indirect interconnections with the banking system.
