FSB List of Global Systemically Important Banks Remains Unchanged
FSB published the 2020 list of global systemically important banks (G-SIBs) using end-2019 data and an assessment methodology designed by BCBS. The list for 2020 contains the same 30 banks that were on the list for 2019. The assignment of G-SIBs to buckets in this list, however, determines the higher capital buffer requirements that will apply to G-SIBs from January 01, 2022. A new list of G-SIBs will next be published in November 2021. FSB also noted that the revised assessment methodology of BCBS, which is expected to result in higher capital buffer requirement, will be now applied in January 2024, one year later than originally scheduled.
In the 2020 list of G-SIBs, three banks have moved to a lower bucket: JP Morgan Chase has moved from bucket 4 to bucket 3 while Goldman Sachs and Wells Fargo have moved from bucket 2 to bucket 1. Moreover, the China Construction Bank has moved from bucket 1 to bucket 2. The provided numbers for each of the five bucket levels represent the required level of additional common equity loss absorbency as a percentage of risk-weighted assets that each G-SIB will be required to hold in 2022. The specified requirement for bucket 1 is 1.0%, bucket 2 is 1.5%, bucket 3 is 2.0%, bucket 4 is 2.5%, and bucket 5 is 3.5%; however, this year, no banks fall in buckets 4 and 5. FSB member authorities apply the following requirements to G-SIBs:
- Higher capital buffer: The G-SIBs are allocated to buckets corresponding to higher capital buffers that they are required to hold by national authorities in accordance with international standards. This year, three banks have moved to a lower bucket while one bank has moved to a higher bucket.
- Total Loss-Absorbing Capacity (TLAC): G-SIBs are required to meet the TLAC standard, along with the regulatory capital requirements set out in the Basel III framework. The TLAC standard began being phased in from January 01, 2019 for G-SIBs identified in the 2015 list that continued to be designated as G-SIBs.
- Resolvability: These include group-wide resolution planning and regular resolvability assessments. The resolvability of each G-SIB is also reviewed in a high-level FSB Resolvability Assessment Process by senior regulators within the Crisis Management Groups of firms.
- Higher supervisory expectations: These include supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance, and internal controls.
Related Links
Keywords: International, Banking, Basel, Regulatory Capital, Systemic Risk, G-SIBs, FSB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
FINMA Identifies and Assesses Risks Facing Financial SectorRelated Articles
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
TCFD Updates Guidance for Financial Disclosures on Climate Risk
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
BCBS Report Examines Progress on Adoption of Basel III Framework
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
ACPR Implements Updates Related to DPM Version 3.1
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
EBA Note Examines Transition Risks of Benchmark Rates
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.
