The Basel Committee on Banking Supervision has emphasized the significance of disclosing banks’ cryptoasset exposures in order to promote transparency and standardized reporting within the crypto space. The committee has proposed mandatory reporting requirements for banks relating to their crypto activities, aiming to address both qualitative and quantitative aspects of crypto exposures.
Enhancing Market Discipline and Bridging the Information Gap
The committee’s proposals encompass comprehensive disclosure of information, including details on the bank’s crypto-related activities, exposures to crypto assets, associated liquidity requirements, and the classification of crypto-related exposures and liabilities. These requirements are targeted at reinforcing market discipline and closing the information gap between banks and market participants.
The Basel Committee aims to implement these disclosure requirements by January 1, 2025, establishing a standardized framework for reporting crypto exposures in banking institutions.
Influence and Role of the Basel Committee
As the primary global standard setter for the prudential regulation of banks, the Basel Committee on Banking Supervision plays a pivotal role in enhancing financial stability. While its decisions do not possess legal force, they significantly impact banking practices and regulations on a global scale.
The committee, established in 1974 by central bank governors from the G10 countries, is headquartered in Basel, Switzerland, at the Bank for International Settlements’ premises. It currently acts as a secretariat for the Basel Committee, facilitating its key objectives and initiatives.
“By standardizing crypto exposure reporting, the Basel Committee seeks to promote market discipline and bridge the information gap between banks and market participants.”
– Basel Committee on Banking Supervision
The consultation period for the committee’s proposals is open, and comments are invited from the public, market participants, and disclosure users and preparers. These comments will be made public on the Bank for International Settlements’ website, unless confidentiality is explicitly requested by the respondent. The deadline for submissions is January 31, 2024.
