The Basel Committee on Banking Supervision (BCBS) and the IFRS Foundation have announced a new cooperation agreement to foster long-term financial stability, enhance market discipline and further develop sharing of information.
The agreement, in the form of a Memorandum of Understanding (MoU), formalizes the mutual interaction and strengthens the existing relationship between the BCBS and the IFRS Foundation at the strategic and working level, focusing on the development of IFRS Standards, the interaction between IFRS Standards and the BCBS Framework and the manner in which they are applied in practice by financial institutions across the world.
The BCBS is the primary global standard setter for the prudential regulation of banks and provides a forum for regular cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability.
The mission of the IFRS Foundation, through its standard-setting body, the International Accounting Standards Board, is to develop a single set of high quality global accounting standards that bring transparency, accountability and efficiency to financial markets around the world, fostering trust, growth and long-term financial stability. IFRS Standards are required by over 125 countries globally.
The BCBS and the IFRS Foundation have a shared objective of serving the public interest. This MoU provides for continued strengthening of future cooperation between the BCBS and the IFRS Foundation in achieving common goals that will increase stability and transparency in the financial markets.
"There is a real desire for international organizations to be more joined up when developing standards for global finance,” says Michel Prada, Chair of the IFRS Foundation Trustees. “This agreement will help achieve that by strengthening and formalizing the already high levels of cooperation between the IFRS Foundation and the Basel Committee."
Stefan Ingves, Chairman of the Basel Committee, said: "I welcome this important initiative which formalizes and strengthens the existing relationship between the IFRS Foundation and the Basel Committee. I look forward to continuing to build on our constructive co-operation in the interest of enhancing financial stability."