The 2023 Banking Turmoil and Liquidity Risk: a Progress Report (BCBS)
The banking turmoil of March-May 2023 was the most significant system-wide banking stress since the Great Financial Crisis in terms of scale and scope. Over the span of 11 days – from 8 to 19 March 2023 – four banks with total assets of about $900 billion were shut down, put into receivership or rescued. Subsequently, a bank with roughly $230 billion of assets was closed on 1 May 2023. The bank failures, while having largely distinct causes, triggered a broader crisis of confidence in the resilience of banks and banking systems across multiple jurisdictions.
Revisions to the Principles for the Sound Management of Operational Risk (BCBS)
In March 2021, the Basel Committee on Banking Supervision (BCBS) published its Revisions to the Principles for the Sound Management of Operational Risk (PSMOR). The principles were introduced in 2003 and subsequently revised in 2011 to incorporate the lessons from the Great Financial Crisis. The 2021 revisions resulted from a 2014 review that indicated that several principles had not been adequately implemented and did not sufficiently capture certain important sources of operational risk.
Principles for Effective Risk Data Aggregation and Risk Reporting (BCBS)
One of the most significant lessons learned from the global financial crisis that began in 2007 was that banks’ information technology (IT) and data architectures were inadequate to support the broad management of financial risks. Many banks lacked the ability to aggregate risk exposures and identify concentrations quickly and accurately at the bank group level, across business lines and between legal entities. Some banks were unable to manage their risks properly because of weak risk data aggregation capabilities and risk reporting practices. This had severe consequences to the banks themselves and to the stability of the financial system as a whole.
Principles for Operational Resilience (BCBS)
In the years that followed the Great Financial Crisis (GFC) of 2007–09, the Basel Committee’s reforms of its prudential framework have enhanced the supervision of the global banking system and resulted in a number of structural changes to strengthen banks’ financial resilience. While significantly higher levels of capital and liquidity have improved banks’ ability to absorb financial shocks, the Committee believes that further work is necessary to strengthen banks’ ability to absorb operational risk-related events, such as pandemics, cyber incidents, technology failures and natural disasters, which could cause significant operational failures or wide-scale disruptions in financial markets. In light of the critical role that banks play in the operation of the global financial infrastructure, increasing their resilience would provide additional safeguards to the financial system.
Minimum Capital Requirements for Market Risk (BCBS)
This document sets outs the amended minimum capital requirements for market risk that will serve as the Pillar 1 minimum capital requirement as of 1 January 2022, replacing the current minimum capital requirements for market risk as set out in Basel II1 and its subsequent amendments.
Corporate Governance Principles for Banks (BCBS)
Effective corporate governance is critical to the proper functioning of the banking sector and the economy as a whole. Banks perform a crucial role in the economy by intermediating funds from savers and depositors to activities that support enterprise and help drive economic growth. Banks’ safety and soundness are key to financial stability, and the manner in which they conduct their business, therefore, is central to economic health. Governance weaknesses at banks that play a significant role in the financial system can result in the transmission of problems across the banking sector and the economy as a whole.
Navigating Complexity: The Role of Risk Maturity Models in Modern Business
In an era marked by unprecedented uncertainty and interconnected risks, organisations are increasingly turning to risk maturity models as a strategic tool to bolster their resilience and competitiveness. Effective risk management is crucial for survival and success, and this is where risk maturity models come into play.
Data Governance and Data Policies at the European Commission
Data governance sets out a framework with clear roles, and the responsibilities and interdependencies of those roles.
Data policies introduce common principles, guidance and working practices in the areas of data management, data interoperability
and standards, and data quality. Equally important are the areas of data protection, information security and intellectual property. However, these are not the focus of this document. Corporate data policies do not specify detailed processes. This allows Directorates-General (DGs)/services to organise themselves in the way that best suits their internal organisation,
while ensuring coordination and alignment across the Commission, including its executive agencies.
Allianz Risk Barometer – Major Business Risks 2024
The top risks in this year’s Allianz Risk Barometer reflect the big issues
facing companies right now – digitalization, climate change and an uncertain geopolitical environment.
Data Governance – Providing Assurance regarding Data Risk Management
While the concept of risk related to data ethics is relatively new, Chief Audit Executives (CAEs) predict that its relevance will grow rapidly over the next five years. Complexity in the collection, analysis, and use of data is expanding rapidly, complicated by artificial intelligence.