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The financial crisis that started in 2007 revealed that many banks, including global systemically important banks (G-SIBs), were unable to aggregate risk exposures fully and quickly. This meant that banks' ability to take risk decisions in a timely fashion was seriously impaired with wide-ranging consequences for individual banks and the stability of the financial system as a whole.
The proposed principles published today are intended to strengthen banks' risk data aggregation capabilities and risk reporting practices. Implementation of the principles will strengthen risk management at banks - in particular, G-SIBs - thereby enhancing their ability to cope with stress. "These proposals are a significant step towards improving banks' risk management capabilities and they will also help to ensure that G-SIBs are resolvable, hence reducing the potential recourse to tax-payers", said Stefan Ingves, Chairman of the Basel Committee on Banking Supervision and Governor of the Sveriges Riksbank, Sweden's central bank.
G-SIBs are required to implement the principles in full by the beginning of 2016 at the latest. The Basel Committee also believes that the principles can be applied to a wider range of banks, in a way that is proportionate to their size, nature and complexity.
Comments should be submitted by Friday, 28 September, 2012.