The collapse of Germany's Bankhaus Herstatt in 1974 sent shockwaves through the international foreign exchange market and the banking sector, prompting the need for coordinated efforts to establish global banking supervision standards. In response, the Basel Committee on Banking Supervision (BCBS) was established through a resolution at the G10 central bank governors' meeting at the end of 1974.
BCBS Mandate and Objectives
The BCBS, or Basel Committee, focuses on ensuring the soundness of banks globally. It plays a pivotal role in establishing international standards to regulate banking practices and fosters cooperation on matters related to banking supervision. This collaborative effort aims to enhance the stability and integrity of the international banking system.
Evolution and Expansion of BCBS
Over the years, the BCBS has played a crucial role in promoting reforms in the banking regulatory system, particularly in response to the challenges highlighted by the global financial crisis. Notably, it expanded its scope by welcoming countries beyond the G10, positioning itself as an international standard-setting organization for banking regulation and supervision.
Global Membership and Participation
As of the end of 2017, the BCBS boasts a membership of 28 countries, including G20 nations and the European Union. This membership encompasses 45 central banks and banking supervisory institutions. Additionally, non-member central banks, supervisory institution councils, and international organizations actively participate as invited entities. This diverse and inclusive membership reflects the global importance and impact of the BCBS.
Korea's Participation in BCBS
In March 2009, Korea, represented by the Bank of Korea and the Financial Supervisory Service, joined the BCBS. This marked a significant step for Korea in aligning its banking standards and regulatory practices with global norms, contributing to the international cooperative framework established by the Basel Committee.
Conclusion: BCBS and the Global Banking Landscape
In conclusion, the Basel Committee on Banking Supervision stands as a linchpin in the global banking landscape. Through its continuous efforts, it shapes and defines international standards, fostering collaboration among diverse economies and institutions. As the challenges facing the banking sector evolve, the BCBS remains at the forefront of regulatory and supervisory initiatives to ensure the resilience and stability of the global banking system.
