November 21, 2017 / 3:03 PM / in a month

Royal Bank of Canada joins list of globally important banks

TORONTO (Reuters) - Royal Bank of Canada has joined a list of lenders deemed important to the stability of the world’s financial system, becoming the first Canadian back to join the global group of 30 required to hold extra capital.

A Royal Bank of Canada (RBC) sign is seen outside of a branch in Ottawa, Ontario, Canada, May 26, 2016. REUTERS/Chris Wattie

The annual list of globally systemically important banks (G-SIBs) was issued on Tuesday by the Financial Stability Board (FSB), which was established after the 2007-09 global financial crisis to protect the world from future such shocks.

RBC said on Tuesday that it already meets a requirement for G-SIBs to hold an additional 1 percentage point capital buffer and does not expect any impact on its capital position as a result of the change.

Shares in RBC were up 0.3 percent in early trading.

Canada’s banking regulator said the G-SIB designation and subsequent increased regulatory expectations were designed to reduce the likelihood of a banking failure and the potential impact that a failure would have on the global economy.

The Office of the Superintendent of Financial Institutions (OSFI) said RBC was well-positioned to meet the G-SIB requirements, which come into effect in January 2019.

Reporting by Matt Scuffham; Editing by Susan Thomas

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