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Banking regulator examining banks’ exposure to crypto-assets

The Basel Committee on Banking Supervision is conducting an initial stock take on the materiality of banks’ direct and indirect exposures to crypto-assets. It is expected that once BCBS collects the data and assesses national rules on crypto-assets, it will consider whether to formally clarify the prudential treatment of crypto-assets across the set of risk categories. The appraisal was included in a report on crypto-assets by the Financial Stability Board, the group of policymakers and regulators that makes recommendations to the G20. Current Basel rules on bank capital do not explicitly refer to crypto-assets. However, there are minimum capital requirements and liquidity rules for so-called ‘other assets’. In its report, the FSB also announced that it had published a framework, developed with the Bank of International Settlement’s Committee on Payments and Market Infrastructures, for monitoring the risks to financial stability from crypto-assets. The FSB said that while crypto-assets do not pose a material risk to global financial stability at this time, it has recommended vigilant monitoring due to both the speed of developments and data gaps.

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