Global banking regulators issued new guidance Friday targeting the risks associated with settling foreign exchange (FX) transactions.

The Basel Committee on Banking Supervision issued its new guidance, updating measures that were first published in 2000. Since then, it notes, the foreign exchange market has made significant strides in reducing the risks associated with the transaction settlement, but substantial risks remain, it notes, “not least because of the rapid growth in FX trading.”

The original guidance focused mainly on the principal risk element of FX settlement risks, the new guidance is intended to address a broader spectrum of FX settlement-related risks, it notes; including, governance, replacement cost, liquidity, operational, legal, and capital risks. As such, it provides more comprehensive and detailed direction on governance arrangements and the management of these various risks.

“The guidance will be an important step towards further improving banks’ management of FX settlement-related risks, which is a potential cause of major financial disruptions,” said Stefan Ingves, chairman of the Basel Committee and governor of Sveriges Riksbank.

“The Committee encourages full adoption of this guidance by supervisors and their supervised banks, in particular internationally active banks, and intends to monitor and review banks’ and supervisors’ progress in applying this guidance,” he added.