The Basel Committee on Banking Supervision issued today its rules for global systemically important banks (G-SIBs).
Today’s publication, Global systemically important banks: Assessment methodology and the additional loss absorbency requirement, sets out the Basel Committee’s framework to identify G-SIBs, the magnitude of additional loss absorbency that G-SIBs should have, and the arrangements by which the requirement will be phased in.
The Committee also issued today an evaluation and summary of public comments received on its July 2011 G-SIBs consultative paper. After a careful review of the comments, the Committee has reached agreement on the G-SIBs framework including some changes to certain indicators that will improve the methodology for identifying G-SIBs. A few of these changes will be subject to additional testing by March 2012 using updated bank data.
Mr Stefan Ingves, chairman of the Basel Committee on Banking Supervision and Governor of Sveriges Riksbank, Sweden’s central bank, noted that “the measures adopted by the Committee to increase G-SIBs’ ability to absorb losses will help to reduce their probability of failure. This is critical and necessary and will complement the measures also announced today by the Financial Stability Board. Complete and globally consistent implementation of these measures will be essential for a safer and sounder banking system and will contribute to broader financial system stability.”
