RiskTech Forum

Basel Committee issues revised G-SIB framework

Posted: 10 July 2018


The Basel Committee on Banking Supervision released today the Global systemically important banks: revised assessment methodology and the higher loss absorbency requirement. When the Basel Committee first published the global systemically important bank (G-SIB) framework in 2011, it agreed to review the framework every three years to allow for the opportunity to enhance the framework, as needed.

The Committee has concluded the first review of the G-SIB framework. Building on member jurisdictions' experience and the feedback received during last year's public consultation, the Committee has reconfirmed the fundamental structure of the G-SIB framework. 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 decision to maintain the core elements of the G-SIB framework also contributes to the stability of the regulatory environment following the end-2017 finalisation of the Basel III post-crisis reforms.

Based on the review, a number of enhancements to the G-SIB framework have been agreed, including the extension of the scope of consolidation to insurance subsidiaries and the introduction of a trading volume indicator in the substitutability category. The revised G-SIB assessment methodology is expected to be implemented in member jurisdictions by 2021. The Committee will complete the next review of the G-SIB framework by 2021.