The European Banking Authority (EBA) updated today the 2016 list of Other Systemically Important Institutions (O-SIIs) in the EU. O-SIIs - those institutions which, along with Global Systemically Important Institutions (G-SIIs) are deemed systemically important - have been identified by the relevant authorities across the Union according to harmonised criteria provided by the EBA Guidelines. This list also reflects the additional capital buffers that the relevant authorities have set for the identified O-SIIs.
The EBA Guidelines on criteria to assess O-SIIs define the size, importance, complexity (or cross-border activities) and interconnectedness of such institutions.
These Guidelines provide additional flexibility for relevant authorities to apply their supervisory judgment when deciding to include other institutions which might have not been automatically identified as O-SIIs. This approach allows for the assessment of all financial institutions across the EU in a comparable way, whilst still not excluding those firms which may be deemed for one EU jurisdiction on the basis of certain specificities.
The EBA acts as the single point of disclosure for the list of O-SIIs across the EU, while each relevant authority discloses information for its respective jurisdiction, along with further details on the underlying rationale and identification process. This additional information is key for understanding the specific features of each O-SII and get some insight in terms of supervisory judgment, optional indicators used, buffer decisions and phase-in implementation dates.
The list of O-SIIs is disclosed on an annual basis, along with any Common Equity Tier 1 (CET1) capital buffer requirements, which may need to be set or reset. Higher capital requirements will become applicable at least one year after the publication of the O-SIIs list so as to give institutions enough time to adjust to the new buffer requirements.