American banking giants Citi and JPMorgan have topped the Financial Stability Board’s (FSB) list of global systemically important banks (G-SIBs).
Released each year, the ranking shows the financial institutions which hold the most systemic importance within the context of the global economy.
This year Citi replaced HSBC in the second-highest bracket, which means it will now have to hold 2.5% of its assets as buffer capital on top of global minimum requirements to absorb losses during time of crisis.
HSBC has joined BNP Paribas and Deutsche Bank in the third-highest bracket, which requires banks to hold 2% buffer capital.
Barclays, Credit Suisse, Goldman Sachs, Industrial and Commercial Bank of China, Mitsubishi UFJ FG, and Wells Fargo were placed in the 1% surcharge category.
However, no banks were considered important enough to push in to the top category facing a 3.5% capital surcharge.
In November 2011 the FSB published an integrated set of policy measures to address the systemic and moral hazard risks associated with systemically important financial institutions (SIFIs). In that publication, the FSB identified as global systemically important financial institutions (G -SIFIs) an initial group of G -SIBs, using a methodology developed by the BCBS.
The November 2011 report noted that the group of G -SIBs would be updated annually based on new data and published by the FSB each November.