FSB Assigns Lower Capital Requirement to Bank of America

Two of the 29 global systemically important banks (G-SIBs) moved to different “buckets” in 2024, meaning they will have a higher or lower capital requirement than they did before, the Financial Stability Board (FSB) said Tuesday (Nov. 26).

Groupe Crédit Agricole moved from bucket 1 to bucket 2, corresponding to a higher capital requirement, while Bank of America moved from bucket 3 to bucket 2, corresponding to a lower one, FSB said in a press release outlining the findings from its 2024 List of Global Systemically Important Banks (G-SIBs).

This annual list is built using end-2023 data and applying the Basel Committee on Banking Supervision (BCBS) assessment methodology, according to the release.

The higher capital buffer requirements established by this year’s list will take effect beginning Jan. 1, 2026, the release said. The lower requirements will be effective immediately, according to the list.

“The changes in the allocation of the institutions to buckets … largely reflect the effects of changes in underlying activity of banks, with the complexity category being the largest contributor to score movements,” the list said.

There were no additions or removals from the list of banks identified as G-SIBs, per the release. The number remains at 29.

G-SIBs are subject to requirements applied by FSB member authorities, including a higher capital buffer, a total loss-absorbing capacity standard, resolvability requirements, and higher supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls, according to the release.

“The G-SIBs are allocated to buckets corresponding to higher capital buffers that they are required to hold by national authorities in accordance with international standards,” the release said.

BCBS released additional information regarding the 2024 G-SIB assessment, saying the further details BCBS provides about global systemically important banks are meant to accompany the FSB’s list.

In an earlier, separate move, the FSB said in July that the “shadow banking” sector needs more regulation.

FSB Chair Klaas Knot wrote to a group of finance ministers and central bank governors at the time, saying recent “incidents of market stress and liquidity strains” have shown that non-bank financial institutions can cause or worsen systemic risks to the larger financial system.