Basel Committee to consider disclosure requirements for banks’ crypto assets
The fallout from the banking crisis earlier this year continues as the Basel Committee on Banking Supervision considers requiring banks to disclose their crypto asset holdings. The committee, which operates under the aegis of the Bank for International Settlements, identified holding crypto as one of the factors that led to the demise of several banks in March.
At its meeting on Oct. 4–5, the committee looked at the causes behind the failures of Silicon Valley Bank, Signature Bank of New York and First Republic Bank, as well as the near-failure of Credit Suisse, which was later bought by its competitor UBS.
Related: Crypto acted as safe haven amid SVB and Signature bank run: Cathie Wood
According to the committee’s report, three structural trends may have indirectly contributed to the banks’ failures: the increasing role of nonbank intermediation in recent years, crypto assets concentrated in a small number of banks and the ability of customers to move their funds faster due to increasing digitalization.
The report also examined policy issues in detail.
The report especially highlighted the role of crypto in the failure of Signature Bank. The committee found:
Signature was closed by the New York State Department of Financial Services on March 12. The regulators stated at the time that crypto was not behind its decision.
The discussion is not an indication of planned revisions to the Basel Framework, the report said. In January, the committee amended its framework to limit crypto assets in bank reserves to 2%.
At its 4-5 October meeting, the #BaselCommittee agreed to consult on cryptoasset and climate disclosures, approved the annual G-SIB assessment and published its report into the banking turmoil of early 2023 #BaselIII
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