2024 Revised Basel Core Principles for Effective Banking Supervision

In a significant step toward enhancing global banking supervision, the Basel Committee on Banking Supervision (BCBS) recently revised the Basel Core Principles for Effective Banking Supervision (BCP).The BCP are the de facto minimum standards for the sound prudential regulation and supervision of banks and banking systems and are universally applicable.This comprehensive update, the first since 2012, reflects the evolving financial landscape and incorporates feedback from a wide range of stakeholders including BCBS members, nonmember countries, the International Monetary Fund (IMF), and the World Bank (WB).After extensive consultation, the revised BCP were approved by the BCBS in February 2024, endorsed by the International Conference of Banking Supervisors in April 2024, and published thereafter-marking a pivotal moment in the global effort to strengthen financial oversight.The revised BCP document is a response to regulatory developments and structural changes within the banking industry over the last decade.It addresses the lessons learned over the last 10 years, including from the pandemic and the March 2023 banking turmoil; key findings from assessments under the Financial Sector Assessment Program (FSAP); and new challenges posed by ongoing structural transformations, notably digitalization and climate change.The revisions emphasize the importance of operational resilience, systemic risk management, and the adoption of a proportional approach to supervision, catering to the global diversity of banks and banking systems.The revised Core Principles and accompanying methodology are set for immediate adoption, with no transitional period.This approach signals a commitment to rapidly elevate supervisory standards worldwide, although it is recognized that achieving full compliance may take time for many jurisdictions.The aim is to foster a global banking environment that is robust and adaptable to future challenges.In anticipation of these standards and their broader implications, the IMF and WB have proactively engaged with member countries to facilitate their understanding and implementation.The purpose of this paper is to inform the Executive Boards of the IMF and WB of the main changes in the revised Principles and accompanying methodology and seek endorsement by the IMF Board for the purposes of undertaking assessments and preparing Reports on the Observance of Standards and Codes (ROSCs).