LONDON, Sept 14 (Reuters) – This year’s bank turmoil showed some boards and senior management failed in their most basic responsibilities and more regulatory guidance may be needed, a global watchdog said.

A handful of banks with more than $1 trillion in assets, including Credit Suisse and Silicon Valley Bank, either collapsed or were rescued between March and May of this year, sending shockwaves through global markets.

Pablo Hernandez de Cos, chair of the Basel Committee, said on Thursday that the turmoil highlighted many shortcomings. The Basel Committee writes capital rules for banks, determining how much they need to set aside in case they get into difficulty.

“It is of deep concern to see that, in 2023, some banks’ boards and senior management failed in their most elementary responsibilities of overseeing and challenging a bank’s strategy and risk tolerance,” de Cos said in a speech.

“More is clearly needed to shore up such responsibilities.”

The committee is completing a stocktake to see what lessons can be learned, de Cos said.

Most of the banks that failed during the turmoil were not subject to Basel’s standards, said de Cos, who is also governor of the Bank of Spain.

Banking regulators needed to develop a thorough understanding of the viability and sustainability of banks’ business models, he added.

There is broad agreement to prioritise further work to strengthen supervisory effectiveness, including identifying issues that could merit additional global guidance, he said.

There will be further analysis of how bank liquidity rules worked, whether tougher capital rules are needed to cover risks from interest rate moves, how banks deal with large-scale deposit withdrawals, and how capital instruments are written down in a crisis.

Basel may also consider how national regulators decide to exempt a bank with cross-border features from the committee’s standards, de Cos said.

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