New Telegraph

Basel issues principles to boost banks’ resilience

SAFEGUARDS

Technology-related threats have increased importance of banks’ operational resilience

 

 

The Basel Committee on Banking Supervision has issued principles for operational resilience, which aim to make banks better able to withstand, adapt to and recover from severe adverse events.

 

In a statement posted on its website yesterday, the committee said it was also issuing revisions to its Principles for    the Sound Management of Operational Risk (PSMOR), thus reflecting the natural relationship between operational resilience and operational risk.

 

According to the statement, “given the critical role played by banks in the global financial system, increasing banks’ resilience to absorb shocks from operational risks, such as those arising from pandemics, cyber incidents, technology failures or natural disasters, will provide additional safeguards to the financial system as a whole.

 

“In recent years, the growth of technology-related threats has increased the importance of banks’ operational resilience. The Covid-19 has made the need to address these threats even more pressing.”

 

It noted that the principles for operational resilience build upon the PSMOR, and are largely derived and adapted from existing guidance on outsourcing-, business continuity- and risk managementrelated guidance issued by the Committee or national supervisors over a number of years.

 

“By building upon existing guidance and current practices, the committee is seeking to develop a coherent framework and avoid duplication.

 

The operational resilience principles focus on governance; operational risk management; business continuity planning and testing; mapping interconnections and interdependencies; third-party dependency management; incident management; and resilient cyber security and ICT,” the statement said.

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