Basel Committee approves disclosure framework and capital standard for banks' cryptoasset exposures and amendments to interest rate risk in the banking book standard, and agrees to consult on third-party risk principles
- Basel Committee approves disclosure framework for banks' cryptoasset exposures and agrees to make targeted amendments to its cryptoasset standard.
- Agrees to update the interest rate shock sizes and associated methodology in its interest rate risk in the banking book standard.
- Agrees to consult on updated principles for the sound management of third-party risk.
The Basel Committee on Banking Supervision met virtually on 2 and 3 July to discuss a range of policy and supervisory initiatives.
Cryptoassets
The Committee reviewed the comments received on its consultations related to a disclosure framework for banks' cryptoasset exposures and a set of targeted amendments to its cryptoasset standard published in December 2022.
It approved a finalised disclosure framework, which includes a standardised set of public tables and templates covering banks' cryptoasset exposures. These disclosures aim to enhance information availability and support market discipline. The framework will be published later this month, with an implementation date of 1 January 2026.
The Committee also approved a set of targeted revisions to the cryptoasset prudential standard. These revisions aim to further promote a consistent understanding of the standard, particularly regarding the criteria for stablecoins to receive a preferential "Group 1b" regulatory treatment. The updated standard will be published later this month, with an implementation date of 1 January 2026.
Members also discussed the prudential implications of banks as potential issuers of tokenised deposits and stablecoins. Members noted that the scale and magnitude of financial stability risks from such products depend in part on their specific structures and jurisdictional laws and regulations. Based on current market developments, these risks are broadly captured by the Basel Framework. The Committee will continue to monitor this area and other developments in the cryptoasset markets.
Interest rate risk in the banking book
The Committee reviewed the comments received on its consultation proposing a set of targeted adjustments to its standard on interest rate risk in the banking book (IRRBB).
It approved a set of adjustments to the specified interest rate shocks in the IRRBB standard, consistent with commitments in the standard to periodically update their calibration. The Committee also agreed to make targeted adjustments to the methodology used to calculate these shocks to better capture interest rate changes during periods when rates are close to zero. The updated standard will be published later this month, with an implementation date of 1 January 2026 for the adjustments.
These changes are unrelated to the Committee's analytical work on IRRBB following the March 2023 banking turmoil, which is ongoing.
Third-party risk
The Committee agreed to consult on principles for the sound management of third-party risk. The principles would supersede the current guidance on outsourcing in financial services with respect to the banking system. The updated principles reflect the evolution of a larger and more diverse environment of third-party service providers and would help provide a common baseline for banks and supervisors in managing third-party risks. The consultation will be published later this month.
Climate-related financial risks
The Committee reviewed the comments received on its consultation proposing a Pillar 3 disclosure framework for climate-related financial risks. It agreed to continue to work on finalising such a framework as part of its holistic approach to addressing climate-related financial risks.
Note to editors:
The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee has no formal supranational authority, and its decisions have no legal force. Rather, the Committee relies on its members' commitments to achieve its mandate. The Group of Central Bank Governors and Heads of Supervision is chaired by Tiff Macklem, Governor of the Bank of Canada. The Basel Committee is chaired by Erik Thedéen, Governor of Sveriges Riksbank.
More information about the Basel Committee is available here.