The global financial regulatory landscape is evolving with new developments from key international bodies. The Basel Committee on Banking Supervision (BCBS) has issued finalized guidelines for managing counterparty credit risk, and alongside other standard-setters, released three final reports on margin in both centrally and non-centrally cleared markets. Simultaneously, the Bank for International Settlements (BIS) Innovation Hub has unveiled its 2025-26 work program, outlining its innovation agenda.

The BCBS guidelines aim to address long-standing weaknesses in counterparty credit risk management at banks. The guidelines replace the previous 1999 standards and emphasize comprehensive due diligence during onboarding and ongoing operations, a robust credit risk mitigation strategy, diverse metrics for measuring and controlling risks, and a strong governance framework. The BCBS encourages members to fully adopt these practices and will continue monitoring their implementation.

Three reports have been published regarding margin practices in derivative markets by BCBS, the International Organization of Securities Commissions (IOSCO), and the Committee on Payments and Market Infrastructures (CPMI). These reports propose methods to improve transparency, streamline processes, and predict margin requirements more effectively:

1. A report by BCBS, CPMI, and IOSCO details ten policy proposals aimed at increasing transparency of initial margin requirements in centrally cleared markets.

2. A CPMI-IOSCO report offers eight effective practices to enhance liquidity preparedness through improved transparency and efficient handling of variation margins.

3. Another report by BCBS-IOSCO recommends eight practices to improve variation margin processes in non-centrally cleared markets.

The BIS Innovation Hub's updated work program for 2025-26 includes several initiatives:

- Enhancing Horizon Scanning: Improving capabilities to detect trends in financial technology affecting central banks.

- Exploring Synergies: Developing solutions supporting central banks' core duties like monetary policy and financial stability.

- AI-Enabled Tools: Launching Project AISE to automate supervisory tasks using AI tools, and Project Gaia to expand climate-related risk analysis applications.

These updates represent significant steps towards improving financial stability through enhanced regulatory frameworks and technological advancements.