By Huw Jones
LONDON (Reuters) – Global banking regulators said on Friday they stand ready to offer more relief to lenders as a second wave of the pandemic and prolonged remote working test their resilience.
The Basel Committee of banking regulators from the world’s main financial centres said the outlook for global financial stability continues to be uncertain.
It said a protracted recovery from the pandemic and the unwinding and expiration of government and other support measures introduced during lockdowns, such as repayment holidays on credit cards and mortgages, could heighten risks.
“The banking system’s operational resilience will continue to be tested in light of the increase in remote working and banks’ reliance on technology and third-party service providers,” the committee said in a statement after three days of meetings this month.
“The Committee will continue to monitor the risks to the global banking system from Covid-19 and will pursue additional measures if needed.”
It reiterated encouragement to banks to tap some of their capital and liquidity buffers to cushion themselves against the rise in bad loans due to the pandemic so that lending continues to the economy.
“Supervisors will allow banks sufficient time to restore buffers, taking account of economic and market conditions as well as the circumstances of individual banks,” the committee said.
(Reporting by Huw Jones; Editing by Kirsten Donovan)
