EBA published 12 indicators and updated the underlying data from the 35 largest institutions in the EU, whose leverage ratio exposure measure exceeds EUR 200 billion. This end-2017 data contributes to the internationally agreed basis on which a smaller subset of banks will be identified as global systemically important institutions (G-SIIs), following the final assessments of BCBS and FSB.
EBA, acting as a central data hub in the disclosure process, will update this data on a yearly basis and will provide a user-friendly platform to aggregate it across the EU. A stable sample of 33 institutions shows that aggregate values for level 3 assets decreased by 20% from end-2016 and by 39% from end-2014, while, for assets under custody, the total amount increased by 7% from end-2016 and by 16% from end-2013. Intra financial system assets and liabilities both observed a decrease from end-2016, by 6% and 7%, respectively. Total exposures for these 33 institutions, as measured for the leverage ratio, decreased by 1.1% and stood at EUR 24.3 trillion at the end of 2017.
The EBA implementing technical standards and guidelines on disclosure of G-SIIs define uniform requirements for disclosing the values used during the identification and scoring process of G-SIIs, in line with the internationally agreed standards developed by FSB and the BCBS. The identification of a G-SII, which leads to a higher capital requirement, falls under the responsibility of national competent authorities and will be updated by December 15 every year.
Keywords: Europe, EU, Banking, Systemic Risk, G-SII, EBA
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
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