Basel Committee advances ICT, crypto, liquidity risk work

The Committee approved a report detailing various information and communication technology (ICT) risk management practices across jurisdictions, specifically addressing non-malicious ICT incidents.

This report, crucial for enhancing operational resilience in a digitalised technology landscape, is slated for publication next month.

Furthermore, the Committee advanced its targeted review of prudential standards for banks' cryptoasset exposures, with an update expected later this year.

Members also discussed feedback on machine-readable Pillar 3 disclosures, promising further updates.

The implications of artificial intelligence (AI) models for banks' cybersecurity were also noted, recognizing AI's dual potential to both identify vulnerabilities and escalate cyber incidents through malicious use.

The Committee will continue to monitor these developments and foster supervisory insight exchange.

The Committee affirmed the global banking system's resilience, supported by robust capital and liquidity.

However, members noted increased uncertainty from geopolitical tensions and potential second- and third-order effects, like inflationary pressures and supply chain disruptions, warranting continued vigilance.

Discussions also covered non-bank financial intermediation, particularly private credit, where indirect exposures and interconnections are a key watchpoint, necessitating enhanced supervisory scrutiny and cross-border information-sharing.

A workplan was approved for analytical work on the financial impacts of extreme weather events on banks, focusing on physical risk assessment and the role of insurance.

Finally, the Committee advanced efforts to address "window dressing" in the G-SIB framework.