The world’s biggest banks are likely to be hit by capital surcharges that increase progressively based on a lender’s size, how connected it is to other banks and how easily it could be replaced in a crisis, global regulators have told the Financial Times.
The proposals would be good news for the huge, but domestically focused Chinese and Japanese banks and for second-tier European and US banks.
Financial regulators and central bankers from the world’s biggest economies, meeting as the Financial Stability Board, are expected to decide this year which banks are systemically important financial institutions, or Sifis, and how much additional top quality capital they will be required to hold against unforeseen losses.