The Global Risks Alliance (GRA)
Banking risk, resilience, credit, liquidity, operational dependencies and emerging technologies. Banking Nexus is an established platform published by The Global Risks Alliance.
GRA · Established · service level R0
Bank risk management is how banks identify, measure, limit and carry the risks they take, from credit and liquidity to operational, model and climate risk, under prudential rules such as Basel III. Banking Nexus, The Global Risks Alliance's platform for the sector, explains how those risks reach households, firms and the financial system; it assesses no bank and gives no advice.
Bank risk professionals; credit officers; treasury; banking technology and governance.
Stress testing; operational resilience; credit and liquidity frameworks.
Bank resilience guides; cross-system exposure research; sector briefings.
The working screen behind this platform: its structure, terms and states. Names are placeholders and values illustrative.
Bank B · Reporting date Q2
% of RWA vs requirement and buffers
% vs minimum
How physical and transition risk could reach a loan book under different scenarios. Illustrative design values.
Credit quality, concentration and contagion.
TopicBuffers, funding and stress.
TopicThird-party, cyber and process continuity.
TopicFinancial exposure across horizons.
TopicCritical market infrastructure and digital services.
TopicCredit automation and validation.
TopicHouseholds, SMEs and essential systems.
TopicBoards, risk culture and controls.
TopicMortgage, housing, property and broader credit exposures.
TopicIslamic banking structure and professional risk research without religious rulings.
The platform does not set standards. It reads its evidence against the frameworks that competent bodies have adopted, so a finding can be placed where a decision-maker already works.
| Framework or standard | Body | What it sets |
|---|---|---|
| Basel III framework | Basel Committee on Banking Supervision | Minimum capital, leverage, liquidity coverage and stable funding requirements and the capital buffers above them |
| Core Principles for Effective Banking Supervision | Basel Committee on Banking Supervision | Baseline standards for supervisory powers, licensing, risk management and governance, assessed in IMF and World Bank FSAPs |
| Principles for the effective management and supervision of climate-related financial risks | Basel Committee on Banking Supervision | Expectations for bank governance, risk management and scenario analysis of climate-related risk, and for its supervisory review |
| Key Attributes of Effective Resolution Regimes for Financial Institutions | Financial Stability Board | Resolution powers, recovery and resolution planning and cross-border cooperation so a bank can fail without taxpayer support |
| IFRS 9 Financial Instruments | International Accounting Standards Board | Classification of financial assets and forward-looking expected credit loss provisioning in three stages |
| NGFS climate scenarios | Network for Greening the Financial System | Reference transition and physical risk pathways used by central banks and supervisors for climate scenario analysis |
| IFRS S2 Climate-related Disclosures | International Sustainability Standards Board | Disclosure of climate-related risks and opportunities, including financed emissions and climate resilience |
| Supervisory Review and Evaluation Process (SREP) | European Banking Authority and ECB Banking Supervision | Supervisory process assessing business model, governance and risks to capital and liquidity, setting Pillar 2 requirements and guidance |
| Comprehensive Capital Analysis and Review (CCAR) and supervisory stress testing | Board of Governors of the Federal Reserve System | Supervisory process of stress scenarios and capital plan review that sets the stress capital buffer for large US banks |
| ISO 31000 Risk management guidelines | International Organization for Standardization | Principles, framework and process for managing risk across an organisation |
A bank's balance sheet is a map of the economy it serves. Its loans are claims on households, firms and governments; its collateral is houses, land, equipment and inventories; its funding comes from depositors and markets that can withdraw quickly. Banking is inherently leveraged and involves maturity transformation, lending long against short-term funding. That is what makes it useful, and what makes it fragile.
Shocks arrive through several channels at once. A flood or drought impairs collateral and borrower income; an outage at a shared technology provider interrupts payments across many banks; a sudden loss of confidence drains deposits in hours through digital channels. Losses reduce capital, which reduces lending, which deepens the downturn that caused the losses. Concentrated exposures to the same regions, sectors or counterparties mean that many banks can be hit together.
Banks also depend on each other and on shared infrastructure: interbank funding, payment and settlement systems, cloud and software providers, and common models and data. Understanding these connections, and the way physical, technological and financial risks combine, is a shared problem no single bank can solve from inside its own balance sheet.
Banking Nexus is designed for bank risk professionals, credit officers, treasury teams and specialists in banking technology and governance. Its methods are stress testing, operational resilience analysis and credit and liquidity frameworks.
Precompetitive guidance on shared resilience questions, developed with practitioners and researchers.
Aggregated research on how hazards, technology and other sectors reach bank balance sheets.
Concise briefings on emerging issues for the banking profession.
GRA is a nonprofit business league for the financial services industry. It does not lend, underwrite, rate, invest, advise on or arrange transactions, introduce counterparties or take transaction-based pay, and readiness work is not approval.
Banking Nexus draws on five canonical methods: financial economics and macro-finance, probability and statistics, network science and contagion, financial and risk engineering and artificial intelligence and machine learning; see the STEM foundation of Banking Nexus. Four chapters carry focused work: Trade and Supply Chain Finance, Housing and Property Finance, Financial Services Risk Management and Islamic Finance and Takaful.
The hazard and dependency evidence that banks need comes from The Global Centre for Risk and Innovation (GCRI), on platforms such as Climate and Hazards, Water Nexus, Energy Nexus and Disaster Resilience. Governance dialogue on capital and climate is convened by The Global Risks Forum (GRF) on Capital Nexus and Climate and Nature Governance. See all counterparts.
Banking Nexus studies how banks take, measure and carry risk, and how that risk reaches households, firms and the wider financial system. Its pages cover credit and counterparty exposure, capital and liquidity, operational and third-party resilience, payment dependencies, climate and nature risk, models and AI, governance and Islamic banking. Each page sets out mechanisms, indicators, sources, methods and the board and supervisory decisions the evidence serves. It is shared industry understanding from The Global Risks Alliance, not investment or financial advice.
Default, migration and concentration in loan books and trading exposures, and how losses pass between counterparties.
Loss-absorbing capital, liquidity buffers and funding structures, and how they behave when markets and depositors come under stress.
Continuity of important services through cyber incidents, third-party failures and process breakdowns, within stated impact tolerances.
Payment systems, central counterparties, settlement systems and the digital services banks depend on to move money and collateral.
Physical and transition risk to loan books and collateral across short, medium and long horizons, explored through scenario analysis.
Credit scoring, provisioning and capital models, and the validation and governance that machine learning now demands.
Lending to households, small firms, housing and essential services, and how bank stress becomes a credit squeeze.
Boards, risk culture, lines of defence, supervisory review and resolution planning, including the structures of Islamic banking.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Basel III | The Basel Committee's international framework of capital, leverage and liquidity standards for internationally active banks. |
| CET1 ratio | Common equity tier 1 capital as a share of risk-weighted assets, the core measure of a bank's loss-absorbing capital. |
| Liquidity coverage ratio | High-quality liquid assets relative to net cash outflows over a thirty-day stress period. |
| Expected credit loss | The probability-weighted estimate of credit losses that IFRS 9 requires banks to provision for. |
Every claim on Banking Nexus rests on methods with a canonical page in the STEM Commons, so readers can see what a finding depends on and where its limits lie.
A question becomes evidence, a governed build, an organized community, a controlled test, a reviewed publication and, finally, a decision taken by the competent authority under its own rules.
Fig.The Nexus cycle on this platform, from question to renewal. Design, not a record of a run.
GCRI studies a field as science, GRF governs it and GRA builds shared financial understanding of it. Banking Nexus links to its counterparts so that work on one side is visible on the others.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.