Basel Committee consults on measures to address window-dressing in the G-SIB framework

Press release  | 
07 March 2024
  • The

    Basel Committee on Banking Supervision has published a consultation on potential measures to address window-dressing behaviour in the context of the framework for global systemically important banks (G-SIBs).

  • Potential

    revisions would require banks to report and disclose the indicators used to calculate G-SIB scores based on average values over the reporting year, rather than year-end values.

  • The Committee invites comments on the consultation by 7 June 2024.

The Basel Committee on Banking Supervision issued today a consultation on revisions to the global systemically important bank (G-SIB) assessment framework aimed at mitigating "window-dressing" behaviour by some banks in the context of the G-SIB framework.

Such regulatory arbitrage behaviour seeks to temporarily reduce banks' perceived systemic footprint around the reference dates used for the reporting and public disclosure of G-SIB scores.

As noted previously by the Committee, window-dressing by banks is unacceptable. Such behaviour undermines the intended policy objectives of the Committee's standards and risks disrupting the operations of financial markets.

The proposed revisions aim at constraining banks' ability to lower their G-SIB scores through window-dressing. This will be achieved by requiring banks participating in the G-SIB assessment exercise to report and disclose most G-SIB indicators based on an average of values over the reporting year, rather than year-end values. An accompanying working paper sets out the analysis supporting the consultation.

The Committee welcomes comments on all aspects of the consultation from stakeholders. Comments should be submitted here by 7 June 2024. All comments will be published on the website of the Bank for International Settlements unless a respondent specifically requests confidential treatment.

Also published today is a working paper assessing G-SIB score dynamics over the past decade.

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 Pablo Hernández de Cos, Governor of the Bank of Spain. 

Working papers contain technical analysis on topical subjects carried out by Committee experts, working groups, BCBS member institutions or the Secretariat. The views expressed in the working papers are those of their authors and do not represent the official views of the Committee, its member institutions or the BIS.

More information about the Basel Committee is available here.