Thursday, April 28, 2016

OFR Data Finds US Banks Still the Most Systemically Important

Author: David Schwartz J.D. CPA

On April 13, 2016, the Office of Financial Research (OFR) published its annual systemic importance data for the world’s larges banks.  Based on data released in 2013 and 2014 by the Basel Committee, the OFR’s report examined data for the global 30 banks designated as G-SIBs, which included eight US bank holding companies.  The OFR’s data collection and analysis is particularly significant because, beginning this year, regulators will employ this systemic importance data in determining capital requirements for banks.


Among the OFR’s findings were that the systemic importance scores for US G-SIBs remained relatively constant over the measurement periods, with Chinese banks gaining in systemic importance.   While US bank systemic scores were stable, the report concludes that they still remain among the most systemically important due to their interconnectedness and the unique nature of their business lines, financial products, and services. 


". . . systemic importance scores rose significantly for three of the largest Chinese banks and Wells Fargo & Co. In addition, U.S. banks continued to have the highest systemic importance scores. The scores show that many of the largest U.S. banks are highly interconnected and lack substitutes for the financial services they offer."