Regional Seminar on Basel III and its Implementation Challenges*
São Paulo, Brazil, March 14-15, 2019
CEMLA, FSI, ASBA and Central Bank of Brazil
The Regional Seminar on Basel III and its implementation challenges was held in São Paulo, Brazil, on March 14 and 15, 2019. Jointly organized by the Financial Stability Institute (FSI), the Center for Latin American Monetary Studies (CEMLA), and the Association of Supervisors of Banks of the Americas (ASBA); and under the auspices of the Banco Central do Brasil.
The seminar was attended by 45 delegates from 22 institutions, including Latin American and Caribbean (LAC) central banks and banking supervisory authorities. The aim of this regional seminar was to update participants on revisions to the Basel III international regulatory framework and to discuss the challenges and exchange experiences in relation to implementing Basel III standards.
The following summarizes the key messages that were exchanged at the seminar:
In LAC, over the last 3 decades, the efforts to strengthen baking supervision had been a constant. In that sense, regulation on the liquidity coverage ratio and on capital requirements are a reality in the regional banking system, either with a Basel or a domestic standard. More complex Basel III standards are still not well represented in the region, such as operational or market risk under the standardized approaches. Limits on large exposures consists mostly of domestic standards and regulation on the Net Stable Funding region is still pending in many jurisdictions of the region.
Currently the main regional challenges can be classified in two branches, data and limited human resources:
a. Data is a challenge in two-dimensions, in one hand the quality of the reported data by the supervised banking institutions, which many cases need to be improved, and in the other hand, the data gaps between the existing requested data and the data that is required for a proper monitoring.
b. Human resources: with a more complexed banking supervision (included the Basel III reform) regional supervisors consider that the capacity to comply with the supervisory standards are greater, given the limited human resources. In that vein, it is important highlight that the implementation challenges are also transforming into monitoring challenges.
* Due to data restriction, the public information of this event is limited.
Since 2006 the Financial Stability Institute and the Centre for Latin American Monetary Studies, as part of its interinstitutional collaboration agreement, organize two annual events, a regional seminar and a policy implementation meeting. The regional seminars are aimed at professionals from Latin American and the Caribbean (LAC) central banks and other relevant financial authorities; focusing on technical approaches to prudential topics. The policy implementation meetings are aimed at senior officials from LAC central banks and are focused on prudential policy topics.