The Basel Committee has published a proposed Supervisory Framework for Measuring and Controlling Large Exposures. The framework has been developed in response to the failure of the banks to adequately limit exposure to single counterparties prior to the financial crisis.

The Committee is of the opinion that the new framework would underpin financial stability by mitigating the risk of contagion between systemically important banks. Accordingly, the aim of the new standard is to ensure greater consistency in banks’ approaches to measuring, aggregating and controlling exposure to single counterparties. The last guidance provided by the Committee regarding large credit exposures was issued in 1991.