The Financial Stability Board (FSB) has published an updated list of global systemically important banks (G-SIBs). This list includes a new entry being China Construction Bank.
Since November 2012, G-SIBs have been allocated to “buckets” corresponding to the higher loss absorbency requirements that they would be required to hold. The higher loss absorbency requirements begin to be phased in from 1 January 2016 for G-SIBs that were identified in November 2014 (with full implementation by 1 January 2019). The higher loss absorbency requirements for the G-SIBs identified in the annual update each November will apply to them as from January fourteen months later. The assignment of the G-SIBs to the buckets in the updated list determines the higher loss absorbency requirement that will apply to each G-SIB from 1 January 2017.
In addition, G-SIBs in the updated list will be required to meet a new standard on Total Loss Absorbing Capacity (TLAC) alongside regulatory capital requirements set out in the Basel III framework. The new TLAC standard will be phased-in as from 1 January 2019.
G-SIBs are also subject to:
- requirements for group-wide resolution planning and regular resolvability assessments. The resolvability of each G-SIB will also be reviewed in a high-level FSB Resolvability Assessment Process by senior policy-makers within the firms’ Crisis Management Groups; and
- higher supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls.
The list of G-SIBs will be updated in November 2016.
View FSB publishes the 2015 update of the G-SIB list, 3 November 2015