Basel Committee on Banking Supervision

The Basel Committee on Banking Supervision (BCBS) is the body entrusted at the global level with the prudential regulation of banks and, in particular, their solvency. The banking regulation standards agreed by the Committee are not legally binding, but their implementation is based on the commitment by its members to adopt them. The Committee thus promotes a level playing field for all banks competing internationally. It is also an international forum for cooperation on banking supervision.

The main objective of the BCBS is to strengthen banking regulation, supervision and practices worldwide, in order to improve banks’ solvency, liquidity, governance and risk management, and to bring about greater financial stability globally. In this connection, it pursues the following activities, among others:

  • To set and promote global banking regulation standards, monitoring their implementation.
  • To exchange information on the banking sector, identifying the associated risks.
  • To exchange experiences, approaches and techniques among supervisors and central banks.
  • To collaborate with other international bodies in the financial sector, and with central banks and supervisors from countries that are not members of the Committee.

The Committee’s major decisions must be endorsed by the Group of Governors and Heads of Supervision (GHOS), which is the oversight body of the BCBS and comprises the same jurisdictions that make up the Committee.

One of the salient examples of the Basel Committee’s activity is the so-called Basel Accord, which sets international prudential banking regulation standards. The first Basel Accord (Basel I) dates back to 1988. Basel II subsequently came to light in 2004, amending several aspects of the previous Accord. More recently, in December 2017, the overhaul of Basel II was completed, with a new prudential regulation framework known as Basel III being agreed upon.

At present, BCBS priorities include, inter alia, finalising ongoing regulatory initiatives and developing new standards on specific aspects; evaluating the effects of the regulatory reforms agreed upon, following a decade of far-reaching regulatory change; identifying and monitoring new risks; promoting sound supervision; and pushing through on schedule the full and consistent implementation of reforms.

The BCBS comprises representatives from 28 jurisdictions, among which central banks and authorities with responsibility for banking supervision. Further, several international agencies and some countries participate as observers in the BCBS.

The Banco de España has been a member of the BCBS since 2001. The other jurisdictions that are Committee members are Argentina, Australia, Belgium, Brazil, Canada, China, European Union (European Central Bank and Single Supervisory Mechanism), France, Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Sweden, Switzerland, Turkey, United Kingdom and United States.