The Institute of International Finance (IIF) and the Global Financial Markets Association (GFMA) have submitted a joint response letter to the Basel Committee on Banking Supervision (BCBS) supporting the draft principles put forward in their Consultative Document “Principles for operational resilience.”
The Associations in June 2020 submitted a letter to the BCBS and other global standard-setters asking for the development of such principles given that operational resilience has been of high importance for both public sector authorities and financial institutions and has more recently come into even greater focus due to the impact of the COVID-19 pandemic.
Operational resilience is extremely important for the public and private sectors to maintain confidence in the financial industry and to support financial stability and economic growth. Operational resilience is important for individual institutions, and across the financial sector, in support of customers, markets and the communities and broader economies they support nationally and globally. As BCBS members and the standard-setting bodies consider the suggested principles, the letter encourages ongoing collaborative efforts to continuously improve and strengthen the level of operational resilience across the global financial system.
A key priority for our members is global coordination and alignment among policymakers and supervisors on the policy outcomes, terminology and supervisory approaches to operational resilience. Global consistency was an overarching consideration in our development of five guiding principles that were published for discussion by the Associations’ members on how to support the strengthening of operational resilience maturity in financial services. The potential for fragmentation due to divergences in regulatory standards and supervisory oversight poses substantial risks and operational challenges for financial services firms that operate globally and, in turn, for the strength of the financial system.
The following other overarching messages are emphasized in the response letter: