From the perspective of global bank regulators, the US bank JP Morgan is once again the world’s most important institution for the stability of the international financial system. The Financial Stability Board (FSB) has ranked the largest US financial institution in the world’s highest class of systemically important banks.
The commission announced on Tuesday. As a Tier 4 bank (most recent: three), the bank is required to maintain an additional capital reserve of 2.5 (recently: 2.0) percent. A year ago, the FSB no longer ranked JP Morgan’s importance that much.
UBS and CS class at the lowest level
According to the FSB, major Swiss banks UBS and Credit Suisse are once again Tier 1 financial institutions. An additional capital reserve of 1.0 per cent applies to it. Meanwhile, Deutsche Bank remained in the second category. As was the case a year ago, Germany’s largest institute had an additional capital reserve of 1.5 per cent.
On the other hand, the importance of the large French bank BNP Paribas increased by one degree. As a Tier III bank, they now have an additional capital reserve of 2.0 (previously: 1.5) per cent.
The US investment bank Goldman Sachs has also increased in importance by one notch. It is now seen as a Tier 2 bank and must hold an additional 1.5 (prev.: 1.0) per cent stock of capital.
Threats to the financial system
The Financial Stability Board monitors threats to the global financial system on behalf of the G20 countries. It evaluates banks not only according to their size, but also according to the risks involved in the business, and how they relate to networks in the financial system.
Depending on the risks, it sets minimum requirements for additional capital store. National supervisors can impose more stringent requirements. The FSB reviews its list of Global System Significant Banks (G-SIB) annually.
The 30 banks in it this time are the same as they were a year ago. The FSB plans to publish its next G-SIB in November 2022. (awp/sda/reu)
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