The European Banking Authority (EBA) published revised final draft regulatory technical standards (RTS) to specify how to identify the indicators of global systemic importance and revised guidelines (GL) on their disclosure, in response to the revisions introduced by the Basel Committee on Banking Supervision (BCBS) in July 2018 to the framework for identifying global systemically important banks (G-SIBs) and to the new requirements laid down in the fifth Capital Requirements Directive (CRD V). The BCBS’s revisions introduce a new trading volume indicator and include insurance activities in the indicators-based measurement approach. The CRD V mandates the EBA to develop an additional methodology for the identification of global systemically important institutions (G-SIIs) that excludes the cross-border activities of EU banks in member states of the European Banking Union. This additional EU methodology shall take into account the Single Resolution Mechanism, which could lead to the re-allocation of a G-SII from a higher to a lower sub-category, hence potentially translating into lower capital buffer requirements. These revised RTS will apply from the 2022 G-SII assessment exercise based on end-2021 information.
The EBA GL on G-SIIs disclosure requirements have also been updated. These requirements apply not only to G-SIIs but also to other very large entities in the EU that have an overall leverage ratio exposure measure exceeding EUR 200 billion. The EBA GL enable authorities to identify and score large institutions and ensure disclosure in a timely manner, even before the identification of any G-SIIs.