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Systemic Risk, Pension Funds, Insurers, Asset Managers [12]

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Bullet points include: Circa 30 banks deemed globally systematically important, subject to additional capital requirements of 1% - 2.5%. G-SIBs also subject to: Group-wide resolution planning and resolvability assessments. Higher supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls. Additional Total Loss Absorbing Capacity (TLAC) requirements phasing in from 2019. Other banks may be deemed systemically important in their own jurisdictions. By end 2015 around 160 EU banks caught by CRD systemic risk buffer (with more expected, some member states had not yet selected their approach). Source: ESRB. Logic for classification: negative externalities relating to implicit support and moral hazard, i.e. “too big to fail”, assessment based on: size, interconnectedness, complexity, lack of substitutability, global scope

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