Citi and JPMorgan top list of globally systemic banks

Mon Nov 21, 2016 3:09pm EST
 
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By Huw Jones

LONDON (Reuters) - Citi has joined JPMorgan at the top of global regulators' list of systemically important banks, replacing HSBC and meaning the U.S. bank will have to hold extra capital from 2019 to help preserve financial stability.

The group of 20 economies (G20) agreed after the 2007-09 financial crisis that top banks, whose size and complexity mean a collapse could wreak havoc in markets, should hold extra capital, according to the level of risk they present.

Members of the list of 30 lenders will also have to begin holding bonds from 2019 that can be written down to help replenish capital that is burnt through in a crisis.

In the annual update of rankings published on Monday by the G20's Financial Stability Board (FSB), Citi has replaced HSBC in the top "bucket" facing a 2.5 percent capital surcharge on top of global minimum requirements.

The measure announced by the FSB does not have an impact on any of Citi's binding regulatory metrics, the bank said in an e-mailed statement.

No lender joined or dropped out of the top 30 list this year.

Lenders on the list typically already meet or exceed the amount of capital they must hold due to pressure from regulators and markets to dispel any doubts about their resilience.

HSBC joins BNP Paribas and Deutsche Bank in the next category down, with a surcharge of 2 percent. Bank of America rose a category to join them.   Continued...

 
A man walks into the JP Morgan headquarters at Canary Wharf in London May 11, 2012.  REUTERS/Dylan Martinez/File Photo