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.
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
Our Standards: The Thomson Reuters Trust Principles.