Basel Committee continues to prioritise Basel III implementation, progresses work to strengthen supervisory effectiveness and discusses finalisation of principles on third-party risks

Press release  | 
21 May 2025
  • The Basel Committee continues to prioritise the full and consistent implementation of Basel III.
  • Progresses work to strengthen supervisory effectiveness based on the lessons learned from the 2023 banking turmoil.
  • Aims to finalise principles for the sound management of third-party risk in the banking sector by the end of 2025.

The Basel Committee on Banking Supervision met in Stockholm on 20 and 21 May 2025 to discuss a range of initiatives.

Financial stability outlook

Committee members exchanged views on recent market developments and the financial stability outlook for the global banking system. A heightened level of uncertainty and increased market volatility requires ongoing vigilance by banks and supervisors to ensure that the global banking system continues to maintain its resilience.

2023 banking turmoil

The Committee took stock of its work to develop a suite of practical tools to support supervisors in their day-to-day work as part of its efforts to strengthen supervisory effectiveness in the light of the lessons learned from the 2023 banking turmoil. The initial work covered the supervision of liquidity risk and interest rate risk in the banking book, the assessment of the sustainability of banks' business models and the importance of effective supervisory judgment. The tools do not change or replace existing standards or guidelines and were designed to strengthen supervisory practices and effectiveness worldwide. The Committee will publish an update on the outcome of this work by the end of the year.

Following the meeting of the Group of Central Bank Governors and Heads of Supervision (GHOS) earlier this month, the Committee continues to prioritise the implementation of Basel III framework in full, consistently and as soon as possible. The Committee also discussed its analytical work to assess whether specific features of the Basel Framework performed as intended during the 2023 banking turmoil, such as liquidity risk and interest rate risk in the banking book.

Digitalisation of finance

The Committee reviewed the comments received on its consultation on supervisory principles for the sound management of third-party risk in the banking sector. It also discussed an analysis on the risks and benefits from banks' reliance on third-party service providers.

Building on the comments received and its own analysis, the Committee will publish a final version of the principles by the end of the year.

Members also exchanged views on recent developments related to artificial intelligence and digital fraud. The Committee will continue to monitor developments in these areas.

The Committee also discussed how best to use technological innovation for its Pillar 3 disclosure framework. The disclosure framework enables market participants to access key information about a bank's risk profile. Making these data more easily accessible by publishing them in a machine-readable format would provide an important public good. The Committee will consult on such a proposal by the end of the year.

Financial risks of extreme weather events

At the GHOS meeting earlier this month, the Committee was tasked with prioritising its work to analyse the impact of extreme weather events on financial risks. The Committee will continue to work on operationalising this work over the coming months. The GHOS also tasked the Committee with publishing a voluntary disclosure framework for climate-related financial risks for jurisdictions to consider; the framework will be published in June.

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.