The world’s biggest banks are doing an awful job of managing their data on risk. That was the main conclusion of the Basel Committee on Banking Supervision’s latest review of the progress that the 30 most important lenders have made in recent years.
The committee measured this progress — or lack of it — against basic standards for compiling and reporting risk data that were agreed in 2013. At that time, supervisors like me thought that a very reasonable deadline for full compliance was January 1, 2016.
But by 2017, only three of the 30 “global systemically important banks” were up to snuff while compliance rates across individual standards had barely improved at all. It will be surprising if even half of the big 30 are fully compliant by the end of this year. The Basel committee did not identify which banks had fallen short, but the complete list of 30 includes JPMorgan, Goldman Sachs, Barclays, BNP Paribas and Credit Suisse as well as four Chinese banks.
The Basel data standards are really basic. They say the big banks should always be able to paint an up-to-date, comprehensive picture of the risks they face. When Lehman Brothers collapsed in 2008, most…
