FSB’s G-SIB List Has a Familiar Look
Posted by Colin Lambert. Last updated: November 24, 2022
G-SIB regulation has become more of an issue in FX markets in recent years with several market sources linking it to reduced liquidity around year and even quarter ends in FX swaps markets, and now the 2022 list of banks has been published by the Financial Stability Board (FSB).
The 2022 list of global systemically important banks is based upon data from the end of 2021, and for the first time, the data applies the revised assessment methodology published in 2018 by the Basel Committee on Banking Supervision (BCBS).
The 30 banks on the list remain the same, however there were three changes involving banks moving “buckets”, which brings with it an increase/decrease in the capital allocation required to run the business, as well as other more stringent requirements around issues such as supervisory processes, resolvability and loss capacity. Bank of America has moved from Bucket Three to Bucket Two, while China Construction Bank has dropped out of the top bracket to Bucket Two and BNP Paribas from Bucket Two to Bucket Three.
Alongside the FSB release, the BCBS published updated denominators used to calculate banks’ 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.
The BCBS also reviewed the implications of developments related to the European Banking Union (EBU) for the G-SIB methodology, in particular the treatment of cross-border exposures within the Banking Union. “The BCBS recognised the progress in the development of the EBU and agreed to give recognition in the G-SIB framework to this progress through the existing methodology, which allows for adjustments to be made according to supervisory judgment,” it says.