Basel Committee agrees to revisions to Basel Core Principles

RICS acknowledges the Basel Committee on Banking Supervision's recent efforts to strengthen global banking oversight and address systemic risks. During their meeting on 28–29 February 2024 in Madrid, the Committee not only deliberated on vital market developments and vulnerabilities within the global banking system but also advanced several significant regulatory and supervisory initiatives.

Notably, the Committee's discussions on the vulnerabilities arising from sectors, including commercial real estate, underline the importance of vigilance and robust management of emerging risks, aligning closely with RICS's commitment to promoting transparency and resilience in the real estate market.

The revisions to the Basel Core Principles for effective banking supervision reflect an adaptive approach to the evolving banking landscape since the last update in 2012. RICS views this as a positive step towards enhancing banking stability and integrity, which is essential for maintaining confidence in the financial markets crucial to the real estate sector.

The Committee's efforts to address window-dressing behaviours among globally systemically important banks (G-SIBs) through consultation demonstrate a commitment to curbing regulatory arbitrage and ensuring that banks' systemic footprint is accurately represented. RICS supports measures that enhance the transparency and accountability of financial institutions, as these are critical for the stability of markets, including real estate finance.

Furthermore, RICS appreciates the Committee's holistic approach to climate-related financial risks, particularly the emphasis on scenario analysis to assess the resilience of banks to climate change. This initiative resonates with RICS's own advocacy for sustainability and climate resilience in the property sector, highlighting the importance of forward-looking risk assessment in banking practices.

The Committee's unanimous reaffirmation to fully, consistently, and promptly implement all aspects of the Basel III framework signals a strong commitment to enhancing the robustness of the global banking system. This move is crucial for the stability and sustainability of the financing environment that underpins the real estate market. RICS supports the Basel Committee's workplan for the jurisdictional assessments of Basel III standards implementation, recognizing the importance of regulatory consistency in fostering a secure and efficient financial landscape for real estate and beyond.

For more information, please contact Fausta Todhe, EU Public Affairs Manager, at ftodhe@rics.org.