The Basel Committee on Banking Supervision on Thursday released its revised process for assessing which big banks will be treated as global systemically important banks (G-SIBs), which are subject to tougher capital requirements and closer oversight.
Among other changes, the committee agreed to introduce a trading volume indicator, to extend the scope of consolidation to insurance subsidiaries, and to revise banks’ disclosure requirements.
When regulators adopted the G-SIB framework in 2011 they pledged to review, and update it, every three years. The changes announced Thursday represent the results of the first triennial review.
“There is general recognition that the framework is meeting its primary objective of requiring G-SIBs to hold higher capital buffers and providing incentives for such firms to reduce their systemic importance,” the committee says in a news release.
The next review of the G-SIB framework will be undertaken by 2021.