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    FSB Updates List G-SIBs, Reviews Basel Implementation in Jurisdictions

    November 21, 2022

    The Financial Stability Board (FSB) published the 2022 list of G-SIBs using the end-2021 data and an assessment methodology designed by the Basel Committee of Banking Supervision (BCBS). Meanwhile, the Basel Committee published information on the 2022 assessment of global systemically important banks (G-SIBs), with additional details to help understand the scoring methodology. Additionally, FSB published its annual report and a report to G20 on the framework for enhancing cross-border payments.

    This year's list of G-SIBs features the same 30 banks that were on the 2021 list; however, two banks have moved to a lower bucket: China Construction Bank moved from bucket 2 to bucket 1 and BNP Paribas moved from bucket 3 to bucket 2. Moreover, Bank of America has moved from bucket 2 to bucket 3. The assignment of G-SIBs to the buckets in this list determines the higher capital buffer requirements that will apply to each G-SIB from January 01, 2024. With respect to the G-SIB methodology, BCBS published updated denominators used to calculate bank scores, the thresholds used to allocate the banks to buckets, and the values of the thirteen high-level indicators of all banks in the main sample used in the G-SIB scoring exercise. BCBS also provided the links to the public disclosures of all banks in the full sample of banks assessed. Earlier this year, BCBS reviewed the implications of developments related to the European Banking Union for the G-SIB methodology, in particular the treatment of cross-border exposures within the Banking Union. A new list of G-SIBs will next be published in November 2023.

    The FSB annual report to G20 provides an overview of the FSB work to tackle current and emerging vulnerabilities. This includes work to enhance the resilience of the non-bank financial intermediation sector, enhance the resolvability of central counterparties, enhance cross-border payments, strengthen regulation and supervision of risks from financial institutions’ reliance on critical third-party providers, strengthen the reporting and sharing of information related to cyber incidents, assess and address climate-related financial risks, and achieve internationally consistent and comprehensive regulation of crypto-asset activities and markets, including stablecoins. The report warns that the outlook for global financial stability is particularly challenging amidst high inflationary pressures, elevated debt levels, lower growth, and much tighter global financial conditions. The report finds that progress in implementation of G20 reforms continues but remains uneven. Jurisdictions’ adoption of Basel III continues, though there is uneven progress in implementing the final reforms to the capital framework. Implementation of OTC derivatives reforms is well-advanced but further progress continues to be incremental. Work is still ongoing to close gaps in the operationalization of banks’ resolution plans and to implement effective resolution regimes for insurers and central counterparties. The report emphasizes that, in the face of the current challenges for financial stability, timely and consistent implementation of G20 reforms remains as relevant as when the reforms were initially agreed. Going forward, FSB and standard-setting bodies will continue to promote approaches to deepen international cooperation, coordination and information-sharing. 

     

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    Keywords: International, Banking, G SIBs, Systemic Risk, Regulatory Capital, Basel, TLAC, G SIB Assessment, Cross Border Payments, Annual Report, Cross Border Exposures, Stablecoins, G20, FSB, BCBS

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