BANKING, INSURANCE AND FMI QUARTERLY BULLETIN

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Issue: Last Issue 2022
Introduction
Hey folks!
It’s a bittersweet time for the team as we release the final issue of the BIS Bulletin. Over the last issues we have shared with you content relating to the various sectors we are responsible for. We hope you found it as informative as we enjoyed putting it together.
This edition is as much a curtain call for the newsletter as it is a show of gratitude. So, to all those who have taken the time to peruse these pages and supported the newsletter, thank you!
The editorial team: Liz, Mc, Xoli and Lolo
Banking
Revisions to Market Risk Disclosure Requirements
The market risk disclosure requirements include a number of adjustments to reflect the revised market risk framework introduced in Minimum capital requirements for market risk in January 2019.
The Basel Committee on Bank Supervision has issued the revised standard which introduced a “traffic light” approach for capital requirements as a consequence of the outcome of the profit and loss attribution test for banks using the internal models approach. Another significant change is the introduction of the simplified standardised approach as an alternative way of calculating capital requirements for market risk. The revised disclosure standards have been updated to reflect these and other changes in the standards. The revised market risk disclosure requirements come into effect on 1 January 2023.
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Virtual Banking and Beyond (BIS Working Paper)
The integration of technology, finance and services is rapidly changing the banking landscape, as big techs, fintech firms, non- bank financial institutions as well as incumbent banks take up stakes in virtual banking. New technology-driven models exploit the expanding data footprints of individuals and firms to generate information capital and reduce the reliance on collateral when offering loans and other financial services. Data and entities that manage data will be at the heart of this transformation. Financial regulators thus need to ensure that regulatory oversight delivers on the inclusion and intermediation-enhancing benefits of digital finance without compromising traditional regulatory goals. At the same time, there is a pressing need for a system of data governance that allows consumers and business to exercise control over their data through the granting and withholding of consent to the use and transfer of their data.
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McKinsey’s Global Banking Annual Review (December 2021)
As we approach the end of the second year of a worldwide pandemic, the global economy has surprised to the upside, and banks have escaped the worst. But the outlook for the industry remains clouded with half of banks not covering their cost of equity. The valuation gap between leading banking institutions and those trailing behind is once again widening. Decisions made in the next 18 to 24 months will determine which firms emerge on the right side of this divergence.
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