The Basel Committee has announced a series of steps to help make the banking system more resilient to financial shocks. These include:

Enhancing various aspects of the Basel II Framework, including the capital treatment of complex structured credit products, liquidity facilities to support asset-backed commercial paper (ABCP) conduits, and credit exposures held in the trading book.

Strengthening global sound practice standards for liquidity risk management and supervision, which the Committee will issue for public consultation in the coming months.

Initiating efforts to strengthen banks’ risk management practices and supervision related to stress testing, off-balance sheet management, and valuation practices, among others.

“The key building blocks to core bank resiliency are strong capital cushions, robust liquidity buffers, strong risk management and supervision, and better market discipline through transparency.” said Nout Wellink, Chairman of the Basel Committee on Banking Supervision and President of the Netherlands Bank.

The Committee is introducing a number of measures to help ensure sufficient capital, to capture off-balance sheet exposures more effectively and to improve regulatory capital incentives.

Enhancing market discipline through better disclosure and valuation practices.

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