Global Systemically Important Bank (G-SIB) | Practical Law

Global Systemically Important Bank (G-SIB) | Practical Law

Global Systemically Important Bank (G-SIB)

Global Systemically Important Bank (G-SIB)

Practical Law Glossary Item w-016-1137 (Approx. 2 pages)

Glossary

Global Systemically Important Bank (G-SIB)

A bank that is designated by international regulators the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (BCBS) as posing a high risk to international financial stability due to size, complexity, and interconnectedness of exposure to other financial institutions. Any bank with total exposure of more than 200 billion euro is required to disclose to national supervisory authorities a minimum of 12 indicators to be used in the G-SIB assessment methodology. These indicators are then aggregated and used to calculate the scores of all banks in the sample. Banks above a certain cutoff score are identified as G-SIBs and based on their score are allocated to certain buckets which determine their enhanced loss-absorbency capital requirement. These measures are designed to reduce the impact of a G-SIB failure on the global financial system.