Supervisory screening with large language models: finding divergences

Fernando Perez-Cruz, Kumar Rishabh and Ayush Uchil

No 134, BIS Bulletins from Bank for International Settlements

Abstract: We develop a procedure based on large language models to help supervisors review prospectuses against capital rules. This procedure ranks potential divergences for their consideration. We apply it to Additional Tier 1 (AT1) prospectuses from European global systemically important banks. We validate the procedure on anonymised documents from Credit Suisse and Yes Bank, recovering rule-prospectus differences that later mattered in disputes over AT1 loss absorption. This procedure could support other supervisory comparisons, including reviews of national rules against the international standards they implement.

Pages: 8 pages
Date: 2026-08-26
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