May 2026: BIS Publication – Acting under uncertainty – the case for supervisory risk appetite frameworks
by Monica Balan and Raihan Zamil Periodic episodes of banking sector distress invariably expose weaknesses in banks’ governance and risk management and shortcomings in supervision. A recurring challenge for supervisory authorities (SAs) is the lack of an explicit framework to define, manage, and communicate their tolerance for supervisory risk: the risk that supervisory actions or inaction fail to[…]