EBA updated the list of Other Systemically Important Institutions (O-SIIs) in EU. The list also reflects the additional capital buffers that the relevant authorities have set for the identified O-SIIs. The criteria to identify O-SIIs is based on the size, importance, complexity (or cross-border activities), and interconnectedness of institutions.
The list of O-SIIs is disclosed on an annual basis, along with any common equity tier 1 (CET1) capital buffer requirements, which may need to be set or reset. Higher capital requirements will become applicable once relevant authorities decide to set institution-specific buffer requirements as a consequence of this O-SII identification. EBA acts as the single point of disclosure for the list of O-SIIs across EU, while each relevant authority discloses information for its respective jurisdiction, along with further details on the underlying rationale and identification process. This additional information is key for understanding the specific features of each O-SII and to obtain insight on supervisory judgment, optional indicators used, buffer decisions, and phase-in implementation dates.
The list of O-SIIs is also available in a user-friendly visualization tool, including the information on O-SII buffers assigned to identified institutions across EU. O-SIIs are institutions that, along with Global Systemically Important Institutions (G-SIIs), are deemed systemically important. They have been identified by the relevant authorities across EU according to the harmonized criteria provided by EBA Guidelines. EBA Guidelines provide flexibility for relevant authorities to apply their supervisory judgment when deciding to include other institutions that might have not been automatically identified as O-SIIs. This approach allows for the assessment of all financial institutions across EU in a comparable way, while still considering the firms that may be deemed systemically important for one jurisdiction on the basis of certain specificities.
Keywords: Europe, EU, Banking, O-SII, CET 1, Basel III, Regulatory Capital, Capital Buffers, Systemic Risk, EBA
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