The Financial Stability Board (FSB) has updated its list of global systemically important banks (G-SIBs), reflecting changes in the banking sector's landscape. In its annual review announced today, the FSB has removed Italy's UniCredit from the list, suggesting the bank no longer poses a significant systemic risk to the global financial system. In contrast, China's Bank of Communications has been added to the list, now required to hold an additional 1% in capital buffers.
The reshuffling of the G-SIBs list comes after UBS Group AG (SIX:UBSG) moved up a tier, following its historic merger with Credit Suisse (SIX:CSGN) earlier this year. The move signals UBS's increased systemic importance, placing it in a category that demands higher capital reserves and regulatory scrutiny, similar to other major institutions such as Deutsche Bank (ETR:DBKGn) and Goldman Sachs (NYSE:GS).
Additionally, two other Chinese banks, the Agricultural Bank of China (OTC:ACGBF) and China Construction Bank (OTC:CICHF), have risen from bucket 1 to bucket 2 within the capital buffer hierarchy. This escalation is indicative of their growing significance and the expanding influence of Chinese financial institutions on the global stage.
The latest adjustments have brought down the total number of G-SIBs from 30 to 29. The FSB has mandated that banks conform to the new capital requirements within its tiered system by January 1, 2025, ensuring they have adequate capital to withstand financial stresses and maintain stability in the global economy.
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