FSB Publishes List of Global Systemically Important Banks for 2019
FSB published the 2019 list of global systemically important banks (G-SIBs), using the end-2018 data and an assessment methodology designed by BCBS. One bank (Toronto Dominion) has been added to the list of G-SIBs that were identified in 2018. Therefore, the overall number of G-SIBs has increased from 29 to 30. A new list of G-SIBs will next be published in November 2020. In addition to the G-SIB list published by FSB, BCBS published the updated denominators used to calculate scores of banks and the values of the twelve underlying indicators for each bank in the assessment sample. BCBS also published the thresholds used to allocate the G-SIBs to buckets, along with the updated links to public disclosures of all banks in the sample.
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 national authorities require banks to hold in accordance with international standards. Compared with the 2018 list of G-SIBs, one bank—that is, Deutsche Bank—has moved from bucket 3 to bucket 2.
- Total Loss-Absorbing Capacity (TLAC): G-SIBs are required to meet the TLAC standard, alongside 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 (provided that they continued to be designated as G-SIBs thereafter).
- Resolvability: The resolvability requirements for G-SIBs 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 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.
The assessment methodology of BCBS assesses the systemic importance of global banks using indicators that are calculated based on the data for the previous fiscal year-end and this data is supplied by banks and validated by national authorities. The final scores are mapped to corresponding buckets, which determine the higher loss absorbency requirement for each G-SIB. In July 2018, BCBS concluded its first review of the G-SIB framework and published a revised assessment methodology, which is expected to be implemented in member jurisdictions by 2021. BCBS will complete the next review of the G-SIB framework by 2021.
Related Links
Keywords: International, Banking, G-SIB, G-SIB Assessment, Systemic Risk, 2019 G-SIB List, TLAC, Basel III, Capital Buffer, BCBS, FSB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Blake Coules
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
Expert Group of EC Issues Recommendations on Framework for FintechRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.
