EBA consults on criteria to assess other systemically important institutions (O-SIIs)

18 July 2014

The European Banking Authority (EBA) launched today a consultation on draft Guidelines setting forth criteria to identify institutions that are systemically important either at Member State or Union level, the so called ‘other systemically important institutions' (O-SIIs). The Guidelines aim at achieving an appropriate degree of convergence in the identification process as well as at ensuring a comparable, clear and transparent assessment of O-SIIs. The consultation runs until 18 October 2014. 
The draft Guidelines set forth common European criteria for the assessment of O-SIIs with the aim of striking the appropriate balance between a European framework ensuring a level playing field and comparability across the Union, on the one hand, and the need to take into consideration specificities of Member States' individual banking sectors, on the other.
For this purpose, the Guidelines envisage a two-step process for the identification of O-SIIs. In the first step, on the basis of mandatory quantitative indicators (related to size, interconnectedness, relevance for the economy, complexity), competent authorities will obtain scores indicating the systemic importance of each bank. Banks scoring above a certain threshold (upper threshold) will have to be identified as O-SIIs, those scoring below a certain threshold (lower threshold) can never be identified as O-SIIs. 
In the second step of the process, competent authorities can still qualify banks scoring between the lower and upper thresholds as O-SIIs, by using their supervisory judgment, but only on the basis of a closed list of optional indicators set forth in the Guidelines. To ensure a high level of transparency and comparability, competent authorities are required to publicly disclose the reasons why they make use of their supervisory judgment.
Finally, to reduce the reporting burden for small institutions, competent authorities may decide to exclude very small institutions from the identification process, if they assess that they are unlikely to pose systemic threats to the domestic economy.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 18 October 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise. A public hearing will take place at the EBA premises on 19 September from 10.00 to 12.00 UK time.

Legal basis

These Guidelines have been developed in accordance with Article 131(3) of Directive 2013/36/EU (CRD IV), which mandates the EBA to issue guidelines specifying the criteria for the identification of institutions as systemically important either at Member State or Union level (O-SIIs). In line with the provisions laid down in the CRD, competent authorities can require O-SIIs to hold an additional buffer of up to 2 percent of Common Equity Tier 1 (CET1). 

Press contacts

Franca Rosa Congiu

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