Guidelines for the identification of global systemically important institutions (G-SIIs)

Status: Final and translated into the EU official languages

These Guidelines foresee that G-SIIs, as well as other large institutions that have an overall exposure of more than EUR 200 billion Euro and are systemically relevant, will be subject to the same disclosure requirement.

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

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

11 August 2017

The European Banking Authority (EBA) published today 12 indicators and underlying data from the 35 largest institutions in the EU, whose leverage ratio exposure measure exceeds EUR 200 bn. In 2015, the number of banks with a leverage ratio exposure measure exceeding EUR 200 bn was 36 and 3 banks have changed in the sample. This end-2016 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 Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB) final assessments. 
 
A stable sample of 33 institutions shows that aggregate values for over-the-counter (OTC) derivatives decreased by 8% from end-2015 and by 28% from end-2013, while for Trading and Available for Sale Securities, the total amount decreased by 7% from end-2015 and by 33% from end-2013.  Total exposures for these 33 institutions, as measured for the leverage ratio, observed a decrease by 2.1% and stood at EUR 24.6 trillion at the end of 2016.  
 
The EBA defines uniform requirements for the data used in the identification and scoring of potential G-SIIs, in line with the internationally agreed standards. The EBA also acts as a central data hub in the disclosure process, providing a platform to aggregate data across the EU through a user-friendly excel tool. The EBA will continue to disclose this data on a yearly basis.

Background and legal basis

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 FSB and the BCBS.
 
To promote a level playing field in the EU regarding these requirements and 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 and Implementing Technical Standards and the Guidelines have been developed in accordance with Directive 2013/36/EU (Capital Requirements Directive - CRD IV), and on the basis of internationally agreed standards, such as the framework established by the FSB, as well as the standards developed by 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. 

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772

EBA publishes revised final draft technical standards and Guidelines on methodology and disclosure for global systemically important institutions

EBA publishes revised final draft technical standards and Guidelines on methodology and disclosure for global systemically important institutions

13 January 2016

The European Banking Authority (EBA) published today revised final draft technical standards and Guidelines on the further specification of the indicators of global systemic importance and their disclosure. The need for this revision was prompted by the new data template and some minor changes introduced by the Basel Committee on Banking Supervision (BCBS) in January 2015 for the identification of global systemically important banks (G-SIBs). The full data template with the detailed specification of the indicator values will now only be incorporated in the EBA Guidelines and will be updated on an annual basis.
 
The list of EU G-SIBs identified by the BCBS and the global systemically important institutions (G-SIIs) identified by Member States' authorities are identical. In January 2016, the BCBS published a new data template with minor revisions for the year 2016 identification exercise, based on end-2015 business year data. 
 
As a consequence, the Commission's Delegated Regulation (EU) No 1222/2014 on the identification methodology and the Commission Implementing Regulation (EU) No 1030/2014 on disclosure, which contained a data template, have been updated. For practical reasons, the full data template with the detailed specification of the indicator values have now been incorporated in the revised Guidelines. 
 
The revised Guidelines stipulate that not only G-SIIs, but also other large institutions with an overall exposure of more than EUR 200 billion Euro and which are potentially systemically relevant, will be subject to the same disclosure requirement as the G-SIIs. The EBA will act as a central data hub in this disclosure process, thus providing a platform to aggregate data across the whole EU.

Legal basis and background

These Guidelines have been developed according to Directive 2013/36/EU (CRD IV), and on the basis of internationally agreed standards, such as the framework established by the FSB, as well as the standards developed by the BCBS.
The Capital Requirements Directive, (CRD IV) requires G-SIIs (G-SIBs, in BCBS terminology) to hold higher capital levels in order to contain the risks they pose to the financial system and the impact that their potential failure may have on sovereign finance and taxpayers, the so-called  ‘too big to fail' problem. 
 
The identification of global systemically important institutions in the EU is aligned with the framework established by the Financial Stability Board (FSB) and developed by the BCBS. These guidelines will be part of the EU Single Rulebook in banking and aim at enhancing regulatory harmonisation and disclosure across the EU.
 

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772

EBA publishes final draft technical standards and guidelines on methodology and disclosure for global systemically important institutions

EBA publishes final draft technical standards and guidelines on methodology and disclosure for global systemically important institutions

05 June 2014

The European Banking Authority (EBA) published today final draft Regulatory Technical Standards (RTS) on the methodology for identifying Global Systemically Important Institutions (G-SIIs), final draft Implementing Technical Standards (ITS) on special disclosure rules applicable to G-SIIs, and final guidelines on special disclosure rules for large institutions. The identification of G-SIIs in the EU is aligned with the framework established by the Financial Stability Board (FSB) and developed by the Basel Committee on Banking Supervision (BCBS). These standards and guidelines will be part of the EU Single Rulebook in banking and aim at enhancing regulatory harmonisation and disclosure across the EU.

The Capital Requirements Directive, (CRD IV) requires G-SIIs to hold higher capital levels in order to contain the risks they pose to the financial system and the impact that their potential failure may have on sovereign finance and taxpayers, the so-called  ‘too big to fail' problem.

The final draft RTS provide consistent parameters and specify a harmonised methodology for identifying G-SIIs across the European Union (EU) and determining their adequate levels of capital. According to the CRD IV, competent authorities in each Member State shall calculate, on an annual basis, an individual score to measure a bank's systemic significance. To this end, the CRD IV defines five categories of indicators to be used in this scoring process. The final draft RTS specify twelve quantifiable indicators falling under these five categories, which ultimately measure the impact that the failure of an institution may have on the stability of the global financial system. The EBA will support competent authorities in carrying out the identification process, ensuring practicability and convergence.

The final draft ITS define uniform requirements for disclosing the values used during the identification and scoring process of G-SIIs. Uniform and enhanced disclosure will ensure fair competitive conditions between comparable groups of institutions, thus resulting in greater convergence of supervisory practices and more accurate risk assessments across the EU. Furthermore, uniform disclosure aims at improving data quality and strengthening market discipline. This level of disclosure goes even beyond the minimum standards required by the BCBS.

Finally, in order to increase transparency in the identification process, the final Guidelines stipulate that not only G-SIIs, but also other large institutions with an overall exposure of more than EUR 200 billion Euro and which are potentially systemically relevant, will be subject to the same disclosure requirement as the G-SIIs. The EBA will act as a central data hub in this disclosure process, thus providing a platform to aggregate data across the whole EU.

Legal basis and next steps

The final RTS, ITS and Guidelines have been developed in accordance with Directive 2013/36/EU (CRD IV), and on the basis of internationally agreed standards, such as the framework established by the FSB, as well as the standards developed by the BCBS.

The identification as G-SII, which leads to a higher capital requirement, will take place in January 2015 for the first time, and the higher capital requirement will apply one year after the publication by competent authorities in each Member State of banks' scoring results so as to allow institutions enough time to adjust to the new buffer requirement. 

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772