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Reflections on the 2023 banking turmoil

· Pablo Hernández de Cos, Chair of the Basel Committee on Banking Supervision (International)

Summary written by Dark Majestic in its own words · topics: monetary policy and interest rates, financial stability, banking regulation and supervision

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· Pablo Hernández de Cos Wiki · Basel Committee on Banking Supervision WikiReflections on the 2023 banking turmoil

ContextDinner speech in Santiago de Compostela to banking supervisors; the Basel Committee sets global bank standards and reviews lessons from the 2023 banking turmoil.

Why it mattersThe standard setter asks whether its rules on liquidity and rate risk held up when several lenders collapsed this spring.

Problems raised
  1. The 2023 banking turmoil revealed weaknesses.
  2. Markets misread AT1 loss triggers.
  3. Liquidity and interest rate risks were under-managed.
Solutions proposed
  1. Analyse whether the Basel Framework worked as intended.
  2. Review liquidity and interest rate risk rules.
  3. Coordinate with other standard setters.
Read full speech on bis.org ↗

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