1. In the years that followed the Great Financial Crisis (GFC) of 2007-09, the Basel Committee's reforms of its prudential framework have enhanced the supervision of the global banking system and resulted in a number of structural changes to strengthen banks' financial resilience. While significantly higher levels of capital and liquidity have improved banks' ability to absorb financial shocks, the Committee believes that further work is necessary to strengthen banks' ability to absorb operational risk-related events, such as pandemics, cyber incidents, technology failures and natural disasters, which could cause significant operational failures or wide-scale disruptions in financial markets. In light of the critical role that banks play in the operation of the global financial infrastructure, increasing their resilience would provide additional safeguards to the financial system.

2. Even prior to the Covid-19 pandemic, the Committee considered that significant operational disruptions would inevitably test improvements to the financial system's resilience made since the GFC. As the Covid-19 pandemic progressed, the Committee observed banks rapidly adapting their operational posture in response to new hazards or changes in existing hazards that occurred in different parts of their organisation. Recognising that a range of potential hazards cannot be prevented, the Committee believes that a pragmatic, flexible approach to operational resilience can enhance the ability of banks to withstand, adapt to and recover from potential hazards and thereby mitigate potentially severe adverse impacts.