The EBA updates data used for the identification of global systemically important institutions (G-SIIs)

The European Banking Authority (EBA) published today 12 indicators and updated the underlying data from the 36 largest institutions in the EU, whose leverage ratio exposure measure exceeds EUR 200 bn. This end-2018 data contributes to the internationally agreed basis on which a smaller subset of banks will be identified as global systemically important institutions (G-SIIs), following the final assessments from the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB). The EBA, acting as a central data hub in the disclosure process, will update this data on a yearly basis and will provide a user-friendly platform to aggregate it across the EU.

A stable sample of 33 institutions shows that aggregate values for level 3 assets increased by more than 25% from end-2017 returning to the level observed in end-2016 but still 19% lower than end-2013.  Aggregate values for underwriting activity decreased by 10% from end-2017 and by 16% from end-2013.  Total exposures for these 33 institutions, as measured for the leverage ratio, increased by 2.1% and stood at EUR 25.1 trillion at the end of 2018. 

Background legal basis and next steps

The EBA Implementing Technical Standards (ITS) and Guidelines on disclosure of G-SIIs define uniform requirements for disclosing the values used during the identification and scoring process of G-SIIs, in line with the internationally agreed standards developed by the FSB and the BCBS.

To promote a level playing field in the EU regarding these requirements and to increase transparency on the internal financial market, the current level of disclosure goes beyond the minimum standards required by the BCBS, both in terms of granularity of the disclosed information and applicable scope of institutions. Consequently, some of the group-specific templates currently published belong to institutions that have not contributed directly to the BCBS's G-SIB exercise.

The Regulatory Technical Standards (RTS) on the specification of the methodology for the identification and definition of subcategories of G-SIIs, and the ITS and Guidelines on disclosure of  G-SIIs have been developed in accordance with Directive 2013/36/EU (Capital Requirements Directive - CRD IV) on the basis of internationally agreed standards, such as the framework established by the FSB and the BCBS.

The identification of a G-SII, which leads to a higher capital requirement, falls under the responsibility of national competent authorities and will be updated by December 15 every year. The identification will be based on the disclosure of global denominators and G-SIB exercise results, which are expected to be published by the BCBS and the FSB in November each year. The higher capital requirement will then apply after about one year from the publication by competent authorities of banks' scoring results, thus allowing institutions enough time to adjust to the new buffer requirement.