November 21, 2017

FSB published the 2017 list of global systemically important banks (G-SIBs). To identify the G-SIBs, FSB used end-2016 data and an assessment methodology designed by BCBS. Additionally, FSB in consultation with IAIS and national authorities, has decided not to publish a new list of global systemically important insurers (G-SIIs) for 2017. The policy measures set out in FSB’s 2016 communication on G-SIIs, as updated in February 2017, which concerns the higher loss absorbency (HLA) standard, will continue to apply to the firms listed in the 2016 communication.

The list comprises 30 banks and the total number of G-SIBs remain the same as in 2016. However, one bank (Royal Bank of Canada) has been added to the list of G-SIBs identified in 2016 while one bank (Groupe BPCE) has been removed from the list. FSB member authorities apply the following requirements to G-SIBs:

  • Higher capital buffer. There have been a number of changes to the position of banks in relation to the buckets of higher capital buffers that national authorities require banks to hold in accordance with international standards.1 Compared with the 2016 list of G-SIBs, two banks moved to a higher bucket: Bank of China and China Construction Bank moved from bucket 1 to 2. Three banks moved to a lower bucket: Citigroup moved from bucket 4 to 3, BNP Paribas moved from bucket 3 to 2 and Credit Suisse moved from bucket 2 to 1. These changes reflect changes in underlying activity and the use of supervisory judgment.
  • Total loss-absorbing capacity (TLAC). G-SIBs are required by national authorities to meet the TLAC standard, along with the regulatory capital requirements set out in the Basel III framework. The TLAC standard will be phased-in from January 01, 2019 for G-SIBs identified in the 2015 list (provided that they continue to be designated as G-SIBs thereafter).
  • 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 (RAP) by senior regulators within the firms’ Crisis Management Groups.
  • Higher supervisory expectations. These include heightened supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance, and internal controls.

 

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Keywords: International, Banking, Insurance, G-SIB, Basel III, TLAC, HLA, FSB

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