Basel Committee on Banking Supervision's article 239 (BCBS 239) is a set of principles with a clear objective: ‘to strengthen banks' risk-data aggregation capabilities and internal risk-reporting practices (the principles) to enhance risk management and decision-making processes at banks.’
The 14 principles cover four topics: the first three topics address the banks and the fourth supervisors. The initial scope was to address only global and domestic systemically important banks (SIB). Nevertheless, as per the standard, local supervisors may also apply the principles to other banks. The timeframe to implement the standard was aggressive: G-SIBs should have complied by January 2016 and D-SIBs three years after their designation as domestic systemically important bank.
1Implementation / enforcement 01/2010 - 01/2013
3Implementation / enforcement 01/2013 - 01/2016
4In effect 01/2016 -
The Financial Stability Board (FSB) expected Global Systemically Important Banks to comply from January 2016 onwards.
The ECB has published the results of its latest BCBS 239 review in May 2018 ( see Report on the Thematic Review on effective risk data aggregation and risk reporting). It concluded that:
- ‘the implementation status within the sample of significant institutions is unsatisfactory, which is a source of concern.’
- ‘none of the significant institutions have fully implemented the BCBS 239 principles.'
The report also contains important lessons learned which can be used by other financial institutes to implement BCBS 239.