The Basel Committee on Banking Supervision is a committee of banking supervisory authorities
that was established by the central bank governors of the Group of Ten countries in 1974.
It provides a forum for regular cooperation on banking supervisory matters.
Its objective is to enhance understanding of key supervisory issues and improve the
quality of banking supervision worldwide.
The Committee also frames guidelines and standards in different areas - some of the better known
among them are the international standards on capital adequacy, the Core Principles for
Effective Banking Supervision and the Concordat on cross-border banking supervision.
The Committee's members come from Argentina, Australia, Belgium, Brazil, Canada, China,
France, Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, the
Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland,
Turkey, the United Kingdom and the United States.
The Committee's Secretariat is located at the Bank for International Settlements in
Basel, Switzerland.
However, the BIS and the Basel Committee remain two distinct entities.
The Basel Committee formulates broad supervisory standards and guidelines and recommends statements
of best practice in banking supervision in the expectation that member authorities and
other nations' authorities will take steps to implement them through their own national
systems, whether in statutory form or otherwise.
The purpose of BCBS is to encourage convergence toward common approaches and standards.
The Committee is not a classical multilateral organization, in part because it has no founding
treaty.
BCBS does not issue binding regulation; rather, it functions as an informal forum in which
policy solutions and standards are developed.
The Committee is further sub-divided each of which have specific task forces to work
on specific implementation issues: The Standards Implementation Group
Operational Risk Subgroup - addresses issues related to Advanced Measurement Approach for
Operational Risk Task Force on Colleges - develops guidance
on the Basel Committee's work on supervisory colleges
Task Force on Remuneration - promotes the adoption of sound remuneration practices
Standards Monitoring Procedures Task Force - develops procedures to achieve greater effectiveness
and consistency in standards monitoring and implementation
The Policy Development Group Risk Management and Modelling Group - point
of contact with the industry on the latest advances in risk measurement and management
Research Task Force - facilitates economists from member institutions to discuss research
on financial stability in consultation with the academic sector
Trading Book Group - reviews how risks in the trading book should be captured by regulatory
capital Working Group on Liquidity - works on global
standards for liquidity risk management and regulation
Definition of Capital Subgroup - reviews eligible capital instruments
Capital Monitoring Group - co-ordinates the expertise of national supervisor in monitoring
capital requirements Cross-border Bank Resolution Group - compares
the national policies, legal frameworks and the allocation of responsibilities for the
resolution of banks with significant cross-border operations
The Accounting Task Force - ensures that accounting and auditing standards help promote sound
risk management thereby maintaining the safety and soundness of the banking system
Audit subgroup - explores key audit issues and co-ordinates with other bodies to promote
standards
The Basel Consultative Group - facilitates engagement between banking supervisors including
dialogue with non-member countries The present Chairman of the Committee is Stefan
Ingves, Governor of the central bank of Sweden.
The Basel committee along with its sister organizations, the International Organization
of Securities Commissions and International Association of Insurance Supervisors together
make up the Joint Forum of international financial regulators.
See also Basel II
Basel III Basel 4
Bank regulation Joint Forum
References
External links Basel Committee on Banking Supervision at
the Bank for International Settlements website http:bis2information.org: Practical articles,
on BIS2 and risk modelling, submitted by professionals to help create an industry standard.
BCBS: A History of the Early Years, 1974-1997 by Charles Goodhart, reviewed by The Oxonian
Review