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Bloomberg
Global banking regulators said US lenders present a bigger risk to the financial system than last year and should face stiffer capital requirements to ward off threats.
Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. all face higher capital surcharges after they rose in the Financial Stability Board’s latest ranking of the most systemically important banks in the world. Meanwhile, New York-based Morgan Stanley and UK lenders HSBC Holdings Plc and Barclays Plc saw their buffer levels fall, the FSB said in a statement on Monday. The new capital buffers apply starting in 2018.
HSBC’s capital surcharge falls to 2 percent of risk-weighted assets from 2.5 percent, while Citigroup’s buffers rise to 2.5 percent from 2 percent, the FSB said. Barclays surcharge falls to 1.5 percent from 2 percent; Wells Fargo rises to 1.5 percent from 1 percent; and the Industrial and Commercial Bank of China surcharge rises to 1.5 percent from 1 percent.
The FSB, which is led by Bank of England Governor Mark Carney, coordinates oversight of the most globally systemic banks to ensure they have sufficient capital to withstand losses. The capital surcharges are then implemented by national authorities that are members of the FSB.
The regulator said the changes in the list were the result of better data, changes in activities and supervisors’ judgement. The 30 banks on the list are also subject to bank-failure rules, known as total loss-absorbing capacity, that the FSB adopted last year.
Barclays spokesman Will Bowen had no immediate comment on the change. Spokespeople for the other banks that saw their ranking change didn’t immediately reply to requests for comment.