The financial stability Board created by the G20, has published a new list of global systemically important banks. In connection with the tightened capital requirements in the list was replaced by one of the leaders
The financial stability Board (Financial Stability Board, FSB), established by the countries “the big twenty” and the Basel Committee on banking supervision, presented the updated list of global banks that, in the opinion of experts of the Council, are of the greatest importance for the world economy. The list was headed by Citigroup and JP Morgan Chase, while Citigroup ousted from the top row HSBC.
The list is updated annually. Compared to last year, the number and name of banks remained the same, but have changed their distribution due to the fact that in the preparation of the list took into account stricter capital requirements.
As in 2015, the FSB has reacted to 30 systemically important banks from Europe, USA, China and Japan. Of these, 15 banks in Europe (Barclays, BNP Paribas, Credit Agricole, Credit Suisse, Deutsche Bank, Group BPCE, ING Bank, HSBC, Nordea, Royal Bank of Scotland, Santander, Societe Generale, Standard Chartered, UBS and Unicredit). Eight — American: Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, State Street and Wells Fargo. Four China: Agricultural Bank of China, Bank of China, China Construction Bank and Industrial and Commercial Bank of China. Three Japanese Mitsubishi UFG, Mizuho and Sumitomo Mitsui.
Banks are divided into five groups depending on their compliance with the additional requirements buffer maintenance of a base capital of the first level. The buffer is expressed as a fraction of assets on the Bank’s balance sheet, risk-weighted (risk-weighted assets, RWA). Gradually increasing values of the buffer starts from 1% (the”lower” group), then a 1.5% (second group), 2% (third group) and 2.5% (fourth group) to 3.5% (the”upper” group, is traditionally empty). The more important a Bank is, the higher the value of the buffer.
In 2016, the year four banks moved in groups to the level above: Citigroup from third to fourth (share of RWA increased from 2% to 2.5%), Bank of America — from the second to the third (from 1.5% to 2%) and Wells Fargo & Co. and Industrial and Commercial Bank of China — from first to second (from 1% to 1.5%). Three more banks moved to the group level below: HSBC — from the fourth to the third, Barclays is the third in the second, Morgan Stanley — from the second to the first. Thus, HSBC in 2016, lost the status of one of the two most systemically important banks in the world (second to JP Morgan). His place was taken by Citigroup.
Requirements for the capital buffer of systemically important banks, the FSB publishes an annually updated in November, the list traditionally come into effect after 14 months of updates. Thus, the claims made in this list will apply from January 2018.