Sunday, April 9, 2017

BIS Issues New Consultation on G-SIBs

Author: David Schwartz J.D. CPA

On March 30, 2017, the Basel Committee on Banking Supervision (BIS) issued a consultation proposing changes to the framework employed to designate global systemically important banks (G-SIBs). The consultation also proposes higher capital requirements on G-SIBs. The revised G-SIB assessment framework supersedes the framework proposed by BIS in July of 2013, a process BIS has committed to revisit every three years. This latest revision maintains the previously adopted system assessing the relative systemic importance of internationally active banks based on 12 indicators in five categories, resulting in a score that measures the systemic importance of each bank. The bank's overall score is then mapped to buckets that are associated with a higher loss absorbency (HLA) capital requirement. However, the new consultation proposes some modifications to the framework and also seeks feedback on the introduction of a new indicator for short-term wholesale funding.

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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.

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