General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
April 30, 2018

ECB published an article that uses large exposure data to gauge the systemic importance of single supervisory mechanism (SSM) significant institutions. It presents stylized facts from the euro area network of large exposures and derives model-based interconnectedness measures of SSM significant institutions.

The article explores SSM significant institutions’ supervisory reporting of large exposures to gauge the interconnections in the interbank network and beyond, along with the related contagion risk. The article first describes the construction of the interbank network, based on large exposure reporting, and sets out key features of the network. It then examines the macro-prudential policy tools available for addressing systemic risks related to interconnectedness. Next, the measures of interconnectedness, based on the large exposure network, are put into the perspective of existing macro-prudential measures, before providing the final conclusion. The article contains the following key findings:

  • The interbank network is relatively sparse and suggests a core-periphery network structure.
  • The more complex network measures on average correlate highly with the more simple size-based interconnectedness indicators, constructed following the EBA guidelines on the calibration of other systemically important institutions (O-SII) buffers.
  • Policymakers can derive value by considering network-based measures in addition to the size-based interconnectedness indicators, as for some banks these measures can deviate considerably.

 

Related Link: ECB Article

Keywords: Europe, EU, Banking, Large Exposures, Systemic Risk, SSM, Supervisory Reporting, Macro-prudential Policy, ECB

Related Insights
News

MAS Amends Notice 637 on Capital Adequacy Requirements in Singapore

MAS published the final, revised Notice 637 on the risk-based capital adequacy requirements in Singapore.

November 13, 2018 WebPage Regulatory News
News

ESMA Updates Q&A on Implementation of CSD Regulation and MAR

ESMA updated questions and answers (Q&A) documents on the implementation of the Central Securities Depository (CSD) Regulation and Market Abuse Regulation (MAR).

November 12, 2018 WebPage Regulatory News
News

FSB Finalizes and Publishes the Cyber Lexicon

FSB published a cyber lexicon, following the public consultation earlier this year.

November 12, 2018 WebPage Regulatory News
News

SRB Updates Liability Data Reporting Template for 2019

SRB published version 2.7.1 of the Liability Data Reporting (LDR) Template.

November 12, 2018 WebPage Regulatory News
News

IMF Publishes Reports on the 2018 Article IV Consultation with Chile

IMF published its staff report and selected issues report under the 2018 Article IV consultation with Chile.

November 09, 2018 WebPage Regulatory News
News

PRA Issues PS27/18 on Implementing the Extension of SM&CR to Insurers

PRA published the policy statement PS27/18, which provides feedback to responses to the consultation paper CP20/18, on implementing the extension of the Senior Managers and Certification Regime (SM&CR) to insurers (Part 2).

November 09, 2018 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for November 2018

EBA published answers to seven questions under the Single Rulebook question and answer (Q&A) updates for this week.

November 09, 2018 WebPage Regulatory News
News

FED Finalizes the Large Financial Institution Rating System

FED finalized the new supervisory rating system for Large Financial Institutions (LFIs), to better align with the current supervisory programs and practices for these firms.

November 09, 2018 WebPage Regulatory News
News

ECB Publishes Guides for Capital and Liquidity Management by Banks

ECB published the guides for capital and liquidity management by banks in EU.

November 09, 2018 WebPage Regulatory News
News

EC Amends Regulation on Prudent Valuation for Supervisory Reporting

EC published the amended Implementing Regulation (EU) 2018/1627 on prudent valuation for supervisory reporting. Regulation 2018/1627 amends the Implementing Regulation 680/2014.

November 09, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2199