BCBS Publishes Measures for Systemically Important Banks

Bank for International Settlements

June 25, 2011

The oversight body of the BCBS has agreed a consultative document which outlines the parameters that will be used in order to determine which banks fall into the category of 'global systemically important banks' (G-SIBs). This document has now been passed to the Financial Stability Board, and is expected to be issued for consultation at the end of July.

The approach which has been taken revolves around five factors - size, interconnectedness, lack of substitutability, global (cross-jurisdictional) activity and complexity. As a consequence of falling into this category, G-SIBs will need to satisfy higher absorbency standards, with a progressive Common Equity Tier 1 capital requirement ranging from 1% to 2.5% according to their systemic importance.