Senior banking supervisors of the Americas and the Caribbean discussed past, present and future issues facing the region

13th ASBA-BCBS-FSI high-level meeting on banking supervision, Nassau, Bahamas, 30-31 October 2018

Past, present and future Issues facing banking supervisors in the Americas and the Caribbean featured in discussions during the 13th high-level meeting on banking supervision, held on 30-31 October 2018 in Nassau, Bahamas. Hosted by the Central Bank of the Bahamas, the meeting was jointly organised by the Association of Supervisors of Banks in the Americas (ASBA), the Basel Committee on Banking Supervision (BCBS) and the Bank for International Settlement's Financial Stability Institute (FSI).

Past events, particularly the Great Financial Crisis a decade ago, have been influential in shaping fundamental elements of global and regional regulatory approaches and supervisory practices. Participants discussed such approaches and practices, specifically, Basel III implementation, enhanced approaches to early supervisory intervention and implementation of a resolution framework. 

The only way to go is to implement Basel III and to do so faithfully. We need to fight the misguided attempt to sacrifice global stability in order to make national banking sectors more competitive. The risks involved outweigh the returns. And what's more, those who reap the returns are often not those who bear the risks.

Sabine Lautenschläger

Participants also explored current developments that have attracted significant regulatory and supervisory attention in the last few years. These include the opportunities and risks associated with the spreading use of financial technology (fintech) and the challenges of addressing cyber-security risk.

Given the risks posed by technological development for the adequate functioning and eventually also for the integrity and stability of the financial system, effective regulatory action seems indispensable to promote the orderly assimilation of innovations.

Agustín Carstens

The programme then focused on the use of technology to support supervision (suptech) and the experience of national authorities already active in this area. Finally, the financial stability implications of climate change were touched on, together with international efforts to address them.

The meeting wrapped up with a discussion of the implications of international standards for the region's banking system, as well as other regional issues and priorities. 

The Bahamas is currently consulting on a Basel III implementation that will require perhaps 10% of the complexity of the full Basel rules text. Much of this simplification revolves around avoiding model-based approaches, but even the new standardised approaches give a great deal more freedom for small countries to adopt simpler but robust rules. Please continue with proportionality, and encourage the IMF to support this approach as they conduct FSAP reviews.

John A Rolle