The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, has of recent reaffirmed its commitment to implementing all aspects of the Basel III framework. The initial Basel III reforms have played a central role in ensuring that the banking system has thus far remained operationally and financially resilient during the Covid-19 pandemic. Unlike the experience of the Great Financial Crisis, banks have remained resilient and continued to lend to creditworthy households and businesses.
The Basel III standards that remain to be implemented, as finalised in 2017, seek to address some of the weaknesses in the regulatory framework that were exposed by the Great Financial Crisis, including by reducing excessive variability in risk-weighted assets and improving the comparability and transparency of banks’ risk-based capital ratios. Addressing these weaknesses remains as important today as it was pre-pandemic.
The GHOS reviewed the Basel III implementation status as well as plans under way across all its members. It underscored the importance of ensuring that all aspects of the Basel III framework are implemented in a full, timely and consistent manner to provide a regulatory level playing field for internationally active banks. Members unanimously reaffirmed their expectation of implementing these standards as soon as possible.
To that end, the GHOS tasked the Basel Committee with continuing to monitor the implementation of Basel III as part of its Regulatory Consistency Assessment Programme, including through its regular monitoring reports.
The GHOS also agreed to reappoint Pablo Hernández de Cos, Governor of the Bank of Spain, as Chair of the Basel Committee for a second and final term. Members thanked Hernández de Cos for his Chairmanship of the Committee over the past three years and expressed their best wishes for his continued leadership. Hernández de Cos’ second term will commence as of 7 March 2022.
Following his appointment as Chair of the Board of Directors of the Bank for International Settlements, François Villeroy de Galhau stepped down as Chairman of GHOS. The process for selecting his successor will now be initiated.