Climate, Crypto And Updates To Core Principles: BCBS Focus Areas For 2023 – Fin Tech

Following the publication of its Work
Programme and Strategic Priorities for 2023/24 in December
2022, the Basel Committee on Banking Supervision met earlier this
month and confirmed three key work initiatives for
2023.

Building on commitments made in its work programme, the BCBS
plans to:

• Publish a consultation paper on a Pillar 3 disclosure
  framework for climate-related financial risks by the end
  of 2023.




• Consult on changes to its Core Principles for effective
  banking supervision by mid-2023 (the last update was in
  September 2012) – outsourcing, and the links between banks and
  non-bank financial intermediation, are expected to be the subject
  of additional supervisory principles and guidance
  respectively.




• Carry out targeted reviews of the prudential treatment
  of cryptoasset exposures, with a partiuclar focus on the
  treatment of permissionless blockchains and the eligibility
  criteria for Group 1 stablecoins.




• Continue to monitor banks’ cryptoasset activities
  and exposures (the information gathered from the
  monitoring exercise and the targeted reviews is expected to feed
  into the report that BCBS plans to publish in 2023/2024 on the
  banking and supervisory impacts of the ongoing digitalisation of
  finance).

Trilogue negotiations on the final aspects of Basel
III (further changes to the capital requirements directive
and capital requirements regulation) will continue in April 2023,
following the conclusion of the first round of trilogues on 9 March
2023. The ‘output floor’ proposals continue to be a key
sticking point in the negotiations, which are taking place against
a backdrop of concerns expressed by the ECB and EBA that the scale
of deviations from the Basel III framework proposed by the EU
Council and the European Parliament could adversely impact the
reputation, competitiveness and funding costs of the EU banking
sector. We’ll continue to publish insights as the trilogues
progress.

This article contains a general summary of developments and
is not a complete or definitive statement of the law. Specific
legal advice should be obtained where appropriate.