On 27 June 2022, the European Central Bank issued a statement containing details of the methodology that will be used for exercising supervisory discretion regarding cross-border intra-European Banking Union (EBU) exposures in the global systemically important bank (G-SIB) assessment framework.
The Basel Committee on Banking Supervision (Basel Committee) has completed a targeted review of the treatment of cross-border exposures within the EBU on the G-SIB assessment framework noting that progress had been made. The Basel Committee has agreed to give recognition in the G-SIB assessment framework to this progress through the existing methodology, which allows adjustments to be made according to supervisory judgement. A parallel set of G-SIB scores will be calculated for EBU-headquartered G-SIBs and used to adjust their bucket allocations. These parallel scores recognise 66% of the score reduction that would result from treating intra-EBU exposures as domestic exposures under the G-SIB assessment methodology. Any downward adjustment of an EBU-headquartered G-SIB will be limited to a single bucket. This will not affect any bank’s classification as a G-SIB, or the scores or bucket allocations of banks outside the EBU.