Revised Assessment Framework for G-SIBs Proposed

The Basel Committee on Banking Supervision has launched a consultation proposing a revised assessment framework for global systemically important banks. The framework, first published in July 2013, identifies G-SIBs by assessing their contribution to systemic risk and imposes higher capital requirements on G-SIBs to reduce the likelihood of their failure. Identified G-SIBs are placed into buckets based on their score of systemic importance. G-SIBs are also subject to Total Loss Absorbing Capacity requirements and higher supervisory expectations on risk management, risk data aggregation capabilities, risk governance and internal controls. The Basel Committee is proposing to amend the framework by, among other things, removing the cap on the substitutability category, expanding the scope of consolidation to include insurance subsidiaries for three categories, amending the definition of cross-jurisdictional activity, revising disclosure requirements and including further guidance on bucket migration. In addition, the Basel Committee is also asking for feedback on the introduction of a new indicator for short-term wholesale funding.

Responses to the proposals are requested by June 30, 2017. The Basel Committee is proposing a transitional schedule for implementing any revised assessment framework so that any changes announced in November 2017 would take effect in 2019 and the resulting higher loss absorbency requirement would apply from January 2021.

View the consultation paper.

View the existing G-SIB assessment framework.

View the current list of G-SIBs.