Business · Economy · 4 hrs ago
Basel tightens bank reporting to prevent year-end risk manipulation
The Basel Committee has tightened bank reporting rules after finding that some banks temporarily lowered figures used to measure their importance to the financial system.
Banks could previously reduce certain exposures at year-end and increase them again soon afterwards, making their risks look smaller.
The practice could help banks avoid extra regulation tied to their place on a list of 30 banks considered too important to fail.
A European Central Bank report in 2024 said the practice cut banks’ measured systemic risk by as much as 15%.
The largest and near-largest banks must report more often, including quarterly, monthly or daily figures for some measures.
Other banks will need to provide quarterly figures across the categories, rather than daily figures as Basel initially proposed.
Basel also raised the reporting threshold to €350 billion, narrowing which banks must report using systemic-bank criteria.
The Basel Committee has introduced new reporting rules to stop banks from temporarily lowering risk indicators at year-end.
Some large banks must report figures quarterly, monthly or daily, while other banks need to report quarterly.
The Committee said it had evidence that some banks lowered indicators at year-end, understating their systemic importance.
Banks have opposed the changes, which can affect the extra regulatory requirements imposed on systemically important institutions.
A European Central Bank report in 2024 said the practice reduced banks’ systemic risk figures by up to 15%.
- Who
- The Basel Committee on Banking Supervision and the banks it supervises.
- What
- The Committee introduced more frequent reporting requirements to prevent banks from manipulating risk indicators at year-end.
- When
- The article was published on October 21, 2026. The rules’ implementation date is not stated.
- Where
- Not stated
- Why
- The Committee said some banks temporarily lowered indicators at year-end, understating their systemic importance and putting financial markets at risk.
Basel Committee on Banking Supervision
Banks
Window dressing
Basel Committee on Banking Supervision
The Committee said it had evidence that some banks temporarily lowered indicators at year-end, understating their systemic importance.
Banks
Banks denied malpractice in a 2024 joint submission and said Basel lacked solid evidence.
Reporting rules
Basel Committee on Banking Supervision
The Committee introduced more frequent reporting to prevent manipulation while seeking to avoid excessive reporting burdens.
Banks
Banks opposed the regulatory change during the decision process.
A European Central Bank report said banks reduced their systemic risk figures by up to 15% through window dressing.
Banks’ trade associations jointly denied malpractice and accused Basel of lacking solid evidence.
Expansión reported that the Basel Committee had introduced new reporting requirements.
- Reporting for some large banks
- Quarterly, monthly and, in some cases, daily
- Reporting for other banks
- Quarterly in all categories
- Systemic risk reduction cited
- Up to 15%, according to a 2024 European Central Bank report
- Systemically important global banks
- The article says the group includes 30 banks
- Spanish member of the group
- Santander
What people are saying
This behavior undermines the policy objectives intended by the Committee’s standards and puts the proper functioning of financial markets at risk.
The Committee has sought to find a balance between addressing window-dressing practices and avoiding an excessive reporting burden.
solid evidence