Banks are operating in an increasingly complex environment shaped by geopolitical fragmentation, rapid technological change, volatile energy and commodity prices, rising inflation, demographic changes, growing interconnectedness with non-bank financial institutions, and persistent climate and nature-related risks. What does it take for supervisors to remain effective and impactful in this new reality? The challenge facing supervisors today is not simply that there are more risks. Rather, the risk landscape is increasingly uncertain, interconnected and volatile. But this does not mean that supervisors should try to monitor everything, everywhere, all at once. Quite the opposite.
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