Bank for International Settlements – BIS

The Basel Committee on Banking Supervision has published its final disclosure framework for banks’ cryptoasset exposures, as well as targeted amendments to the cryptoasset standard of December 2022. Both standards are to be implemented by 1 January 2026. The final disclosure framework includes a set of standardised tables and templates covering banks’ cryptoasset exposures. They require banks to disclose qualitative information on their cryptoasset-related activities and quantitative information on the capital and liquidity requirements for their cryptoasset exposures. Read more here: https://lnkd.in/eNdKtkxE The targeted amendments to the cryptoasset prudential standard aim to promote a consistent understanding of the standard, particularly regarding the criteria for stablecoins to receive a preferential “Group 1b” regulatory treatment. Various other technical amendments clarify other aspects of the standard. Read more here: https://lnkd.in/eF9j_F5K The Committee will continue to monitor developments in cryptoasset markets and the possible need to mitigate new risks. #BaselCommittee #BaselIII #BaselFramework

The integration of artificial intelligence (AI) within financial services has emerged as a transformative force, promising substantial benefits, including efficiency gains and enhanced customer experiences. At the same time, the rapid pace of AI deployment raises concerns across different policy domains. As the financial landscape evolves, policymakers face the challenging task of establishing a regulatory framework that mitigates these risks without stifling innovation. To help central banks and supervisory authorities navigate this complex landscape, abundant with trade-offs, the BIS’s Financial Stability Institute (FSI) organised a panel on “Policy approaches for addressing risks posed by the use of AI in financial services”, which took place in conjunction with the BIS Annual General Meeting. The panel, chaired by FSI Chair Fernando Restoy Lozano, comprised José Luis Escrivá, Minister, Ministry for Digital Transformation and Civil Service of Spain; Jonathan Dixon, Secretary General, International Association of Insurance Supervisors; Neil Esho, Secretary General, Basel Committee on Banking Supervision; Tajinder Singh, Acting Secretary General, International Organization of Securities Commissions; David Dadoun, Managing Director of Global Regulatory Strategy and Compliance, Microsoft Corporation; and Jessica Renier, Managing Director of Digital Finance, Institute of International Finance. https://lnkd.in/ecDkXX6t #FinancialStabilityInstitute #AI

The Basel Committee on Banking Supervision has finalised adjustments to its standard on interest rate risk in the banking book (IRRBB) following stakeholder feedback on consultation proposals. The adjustments were made in line with the Committee’s commitment to periodically update the standard’s calibration, and to address problems with the treatment of interest rate changes during periods when rates are close to zero. Considering the feedback received, the Committee agreed to changes including: • extending the calibration data to end-2023 to better reflect the latest movements in interest rates; and • reducing the rounding of interest rate shocks to a multiple of 25 basis points to mitigate “cliff effects” and potential distortions across jurisdictions and provide closer alignment with the incremental steps of changes in central banks’ policy rates. The revised standard should be implemented by 1 January 2026. Further details here: https://lnkd.in/eiNZ-TPR #BaselCommittee #BaselIII

Housing costs represent a large portion of household expenditures, especially in advanced economies. Hence, they constitute a significant component of the consumer price index (CPI). These costs have continued to rise at a fast clip during the past two years in many economies, despite the intense monetary policy tightening phase. Has the housing component of the CPI evolved differently compared with past disinflation episodes? Is its strength a cause of concern for central bankers? In the latest BIS Bulletin, Ryan Banerjee, Denis Gorea, Deniz Igan and Gabor Pinter argue that the answer to both questions is “yes”. The housing component of the CPI has moderated since inflation peaked, but less than in past episodes. It remains elevated in several jurisdictions. To some extent, this is part of the buoyancy of services prices, but several housing-specific demand-supply factors are also at work. Strong growth of the housing component is potentially a concern for central bankers. It tends to be very persistent, reflecting how housing costs are measured and how market rents evolve over time. While tighter monetary policy ultimately reduces housing cost inflation, this effect can take a long time to materialise. In the short run, housing costs may increase following an interest rate hike. This can happen if landlords pass on higher costs to tenants, developers reduce supply, or more households turn to renting than owning. #BISBulletin #HousingCosts https://bit.ly/4eZO7EY

🎙️ In the latest episode of our #BISness podcast, Agustín Carstens talks to Krista Hughes about the ideal policy constellation for the fastest growth with the lowest inflation and issues a call to action for governments on public finances. “The sooner the government start consolidating, the better. So it's more than anything a call for action, a call for action towards the medium term so that they can do these adjustments to their public finances.” Check out the podcast on Spotify, Apple Podcasts, your favourite podcast platform or the BIS website - https://lnkd.in/e98e65uw

At the end of June, the delegates from our members gathered at the BIS Annual General Meeting of shareholder central banks in Basel. It was two days full of events, meetings and key moments in line with the BIS mission of promoting international cooperation among central banks. As usual, BIS General Manager Agustín Carstens, Head of Monetary and Economic Department Claudio Borio and Economic Adviser and Head of Research Hyun Song Shin presented the BIS Annual Economic Report. Their presentations are available on our YouTube channel and on the BIS website – https://lnkd.in/eSamcgJG #BIS #CentralBanks #BISAnnualEconReport #InternationalCooperation #FinancialStability

Carlos C. and Jon Frost, from our Office for the Americas, wrote a blog post with The World Bank Maria Teresa Chimienti and Douglas Randall, highlighting how the revolution in fast payments is sweeping across nearly all of Latin America, with huge implications for the affordability, convenience, and customer-centric design of digital financial services. Cash is no longer king in the region. You can read it in English and Spanish. https://lnkd.in/eqqvVSGn #FastPayments #LatinAmerica

The 2024 version of the Bank Resolution Online Course (BROC) concluded recently. BROC is organised annually by the BIS’s Financial Stability Institute (FSI) and the International Monetary Fund, in cooperation with the International Association of Deposit Insurers. Running over 10 weeks, the course covered the fundamental elements of bank resolution frameworks, resolution planning and resolvability, and core aspects of how to make resolution operational. This year, BROC participants came from 151 authorities based in 115 countries. BROC is one of the seven online courses on regulatory topics offered by the FSI, five of which take place annually. #FinancialStabilityInstitute

The BIS is pleased to announce the appointment of two new senior managers of the BIS Innovation Hub (BISH) – Karmela Sophia Holtgreve as Deputy Head, Operations, and Miguel Diaz Diaz as Deputy Head, Strategy. They will start their new roles, which have five-year terms, on 1 September. These appointments reflect the growth of the BISIH, which develops public goods in the technology space to support central banks and improve the functioning of the financial system. In its first five years, the BISIH has opened seven centres around the world – the Eurosystem (Frankfurt and Paris), Hong Kong, London, Nordic (Stockholm), Singapore, Switzerland and Toronto, and leads a global network of central bank experts on innovation. Ms Holtgreve is currently Director General Strategy and Innovation at the Deutsche Bundesbank. In this role, she is responsible for the overall transformation of the Bundesbank and directly runs three main departments: innovation, transformation, and portfolio and strategy. She holds degrees in political science, international relations and European politics from Goethe University Frankfurt and the Universidad Autónoma de Madrid. Mr Diaz is currently the Head of the BISIH’s Toronto Innovation Centre, where he is responsible for leading financial innovation projects and developing new technology to improve payments systems and financial market infrastructure. He was previously Payment Systems and Market Infrastructures General Director at the Bank of Mexico. He holds a PhD in Business Economics from the University of Chicago. Read more about the BISIH here: https://lnkd.in/e2cr5mCS