The Basel Committee's work programme

Updated 30 December 2016

 
2015-16 work programme themes
  • Actively pursue policy development
  • Ensure an adequate balance between simplicity comparability and risk sensitivity across the regulatory framework
  • Monitor and assess implementation of the Basel framework
  • Improve the effectiveness of supervision
 


About the Basel Committee's work programme

The Basel Committee maintains a two-year work programme that serves as an essential guide for the Committee's policy, supervision and implementation activities. The Committee's work programmes are endorsed by the Group of Governors and Heads of Supervision (GHOS) and are developed under the direction of the BCBS Chairman. They are typically split into various themes, reflecting both time-sensitive and long-term issues affecting the global banking system.

2015-16 work programme details

Policy development

The Committee continues to work towards completing the post-crisis reform agenda. Ongoing policy initiatives include:

  • revisions to existing methods of measuring risk-weighted assets (this includes revisions to the standardised approaches for credit, market and operational risks which have been open to consultation)
  • policy development work, including a capital floor based on standardised approaches; consideration of simple, transparent and comparable criteria for securitisations; the fundamental review of the trading book; and interest rate risk in the banking book
  • ongoing work with the Financial Stability Board related to the adequacy of the loss-absorbing capacity of global systemically important banks (G-SIBs) in resolution

In addition to these policy initiatives, the Committee is undertaking three new policy-related issues:

  • assessing the interaction, coherence and overall calibration of the reform policies
  • reviewing tthe regulatory treatment of sovereign risk
  • assessing the role of stress testing in the regulatory framework, in the light of national developments

Interaction, coherence and overall calibration

Now that the major elements of the reform agenda have been agreed, the Committee is assessing the interaction, coherence and overall calibration of the reform policies. The aim of this initiative is to consider how the various regulatory metrics interact and whether the calibration and design of the various elements of the framework are consistent with their intended objectives.

The regulatory framework that has emerged following the crisis has multiple metrics. Compared with the pre-crisis framework - which relied mainly on the risk-weighted capital ratio - the revised regulatory framework now includes a leverage ratio, large exposure limits, the Liquidity Coverage Ratio, the Net Stable Funding Ratio and forthcoming loss-absorbing capacity requirements for G-SIBs in resolution. In addition, stress testing has played an increasingly important role in a number of jurisdictions. The Committee will further assess the potential interactions among these metrics, including the extent to which the various measures bind across different banks and drive bank behaviour.

Balancing simplicity, comparability and risk sensitivity across the regulatory framework

The Committee's aim to balance simplicity, comparability and risk sensitivity combines the issues emerging from its top-down review of the framework and the bottom-up work on risk-weighted asset variability, which were detailed in the Committee's November 2014 report to the G20 Leaders. The G20 report sets out the measures the Committee is taking to simplify the regulatory framework, and to improve consistency and comparability in bank capital ratios. The Committee is also working to consolidate the Basel framework into a single volume.

Monitoring and assessing implementation of the Basel framework

The Committee continues to monitor and assess its members' implementation of the Basel framework. The Regulatory Consistency Assessment Programme (RCAP) helps the Committee evaluate the adoption of its standards by members. The RCAP will be expanded to also cover Basel III's liquidity standards and the frameworks for global and domestic systemically important banks.

Improving the effectiveness of supervision

The Committee continues its work on improving the effectiveness of supervision, focusing on supervisory practices related to stress testing, valuation practices and the role of Pillar 2 in the capital framework.