A global banking watchdog introduced new guidelines covering counterparty credit risk (CCR) management.
The regulations issued by the Basel Committee on Banking Supervision replace the committee’s existing regulations from 1999, according to a Wednesday (Dec. 11) press release.
“The guidelines provide a supervisory response to the significant shortcomings that have been identified in banks’ management of CCR, including the lessons learned from recent episodes of nonbank financial intermediary distress,” the release said.
The report said the committee’s 1999 rules were written in response to the collapse of the Long-Term Capital Management hedge fund and its associated risk management failures. Since then, several other issues have come to light underlining the need for new rules, including the failure of Archegos Capital Management in 2021.
“These incidents have made it clear that certain fundamental CCR practices remain inadequate relative to supervisory expectations,” the report said. “Weaknesses pertain to due diligence, both at initial onboarding and on an ongoing basis; credit risk mitigation practices such as margining; risk measurement practices related to potential future exposure and stress testing; and the governance and senior management oversight of CCR.”
The report came two days after an official from the Bank of England warned that nonbank financial institutions (NBFIs) such as pension funds, insurers, hedge funds and money market funds could threaten financial stability as their role in the financial system increases.
Dave Ramsden, deputy governor of markets and banking for the British central bank, said in a speech that these institutions make up roughly half of the total assets in the financial systems of the United Kingdom and the world amid an ongoing shift in consumer and business savings and borrowing habits.
The Bank of England said last month that it plans to develop the ability to lend to NBFIs to deal with potential liquidity challenges in core financial markets that could threaten the financial stability of the U.K.
The Basel Committee and the Bank of England are among those warning about possible NBFI dangers. In July, Financial Stability Board (FSB) Chair Klaas Knot said “incidents of market stress and liquidity strains” demonstrated that NBFIs can cause or worsen systemic risks to the financial system at large.
We get a lot of press releases here at PYMNTS. We consider all of them, and some are more newsworthy than others. But this one really got our attention. This past week, Diebold Nixdorf made headlines with its announcement of successfully installing two new automated teller machines (ATMs) at the U.S. National Science Foundation’s McMurdo Station in Antarctica. This achievement marks a significant milestone in banking accessibility, to be sure. We would like to meet the crew that installed them. We’d also like to know why they needed two. Was there a line at the first one? More to come on that.
According to Diebold, McMurdo Station is Antarctica’s largest research and logistics hub, supporting a fluctuating population that ranges from fewer than 200 residents during the winter months to up to 1,100 individuals during the summer (October through February). The presence of these ATMs is crucial, it says, as the next closest banking facilities are thousands of miles away, making them the only ATMs on the entire continent. How’s that for a value proposition?
The DN Series ATMs are designed for always-on availability. And why do they need two? One ATM is actively in use, while the second serves as a backup for spare parts, ensuring uninterrupted service in this isolated area. These machines are connected to the DN AllConnect Data Engine, which leverages Internet of Things (IoT) connectivity, machine learning, and artificial intelligence (AI) to monitor their performance. A dedicated team continuously aggregates and analyzes technical data to identify potential issues, enabling remote diagnostics and repairs. The ATM can be maintained by trained staff at NSF McMurdo Station, or the Diebold Nixdorf service team can remotely guide them through the repair process.
Anyway, it got us thinking. Are there other surprising ATMs in extreme locations? Well, of course, there are. Here’s a sampling of what we found.
At an altitude of about 5,364 meters (17,600 feet), the Mount Everest Base Camp in Nepal is another unexpected place to find an ATM. Although it’s not a permanent fixture and is often set up seasonally, it caters to climbers and trekkers who need cash for local transactions. This temporary ATM service underscores the adaptability of banking services in extreme environments.
In some parts of the Amazon rainforest, particularly in Brazil and Peru, ATMs can be found in small villages and towns. These machines are vital for local communities, providing access to cash in areas where digital payment options might be limited. The presence of ATMs here demonstrates how banking services can reach even the most remote communities.
Located in the Tibet Autonomous Region, Nagqu is home to one of the highest ATMs in the world. This region is very remote, with limited infrastructure, making the presence of an ATM a notable example of banking accessibility in extreme environments.
In the Thousand Islands (Kepulauan Seribu) off the coast of Jakarta, Indonesia, there’s a floating ATM. This unique ATM serves the local community and tourists on the islands, demonstrating how banking services can adapt to isolated marine environments.
Longyearbyen, the administrative center of the Svalbard archipelago in Norway, boasts the most northerly ATM. This location is one of the most remote inhabited places on Earth, with limited access to mainland Norway, making the ATM a vital service for residents and visitors.
On a more serious note, the installation of ATMs in places like Antarctica and other remote locations highlights the evolving nature of banking technology. With advancements in IoT, AI and remote diagnostics, it’s becoming increasingly feasible to provide banking services in areas previously considered inaccessible. As we look to the future, it will be interesting to see where else ATMs might appear. Whether it’s on a remote island, at the top of a mountain or even in space, the ability to access cash is becoming more universal than ever. And who knows? Maybe one day, we’ll see an ATM on Mars, serving the first interplanetary travelers.
For now, the presence of ATMs in unexpected places reminds us that banking is not just about transactions; it’s about connecting people and communities across the globe, no matter how remote they might be.
