The quest for supervisory effectiveness
· Pablo Hernández de Cos, General Manager of the Bank for International Settlements (International)
Summary written by Dark Majestic in its own words · topics: banking regulation and supervision
PH · Pablo Hernández de Cos Wiki · Bank for International Settlements WikiThe quest for supervisory effectivenessContextSpeech by the BIS General Manager on bank supervision, drawing lessons from the bank failures of March 2023.
Why it mattersA frank BIS speech on why banks failed in 2023 despite meeting the rules, and how supervisors should act sooner.
Problems raised- Banks failed in 2023 despite meeting capital rules.
- Weak governance and risk management were the real causes.
- Supervisors hesitate to act for fear of legal challenges.
Solutions proposed- Define a supervisory risk appetite, including judgement errors.
- Link supervisory ratings more tightly to actions.
- Prioritise risks through a truly risk-based approach.
Read full speech on bis.org ↗More from Pablo Hernández de Cos · Bank for International Settlements · all speeches
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