The G20 Financial Council no longer considers UniCredit a systemically important bank
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Today, November 27, Financial Stability Board (FSB) published its list of banks (published annually) that play the most important role for the normal functioning of the global financial market. This year the composition of the list has changed – the list is quite stable, so changes in it do not occur every year. The Italian bank UniCredit was removed from it, as well as the Swiss Credit Suisse, which was purchased by UBS. One new bank was also added to the list – China’s Bank of Communications. The total number of banks on the list thereby decreased from 30 to 29.
The leader of the list, as in previous years, was JP Morgan Chase. The FSB divides all banks into five baskets, each requiring an additional capital reserve – from 1% to 3.5%, depending on the degree of their importance to the market. As before, there is not a single bank in the basket with a 3.5% requirement; the 2.5% requirement applies only to the leader of the list, JP Morgan. Several banks – UBS, as well as the Chinese Agricultural Bank of China and China Construction Bank – are now rated as more important by the FSB, having been moved from the lowest capital requirement basket of 1% to the 1.5% basket.
The FSB, created by the G20 summit in the wake of the global financial crisis, has published an annual list of banks that are systemically important to the global financial system since 2011. Among the parameters by which the FSB evaluates banks are the volume of assets, the scope of transnational operations, and interconnectedness with other market participants. Among the requirements for such banks are capital requirements, total loss-absorbing capacity (TLAC), the ability to settle debt, etc.
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