FSB has published a suite of updates on the implementation of its framework for systemically important financial institutions (SIFIs). It has amended its list of global systemically important banks (G-SIBs) so it now contains 28 names, and allocated them to buckets according to the amount of higher loss absorbency they would need. This requirement will be phased in starting from 2016, initially for those G-SIBs on the list as of November 2014. The report also covers the progress made towards the resolution of SIFIs. It gives an overview of national reforms, FSB’s thematic peer review, and other developments in terms of assessment methodology and specific requirements for the resolution of non-banking institutions or of firms with significant holdings of client assets. In the case of global SIFIs, effective resolution also requires the creation of cross-border crisis management groups (CMGs) and institution-specific cross-border cooperation agreements. Once the recovery and resolution plans are in place during the first half of 2013, resolvability assessments led by national resolution authorities, CMGs and FSB will follow. Finally, FSB also reports on increasing the intensity and effectiveness of SIFI supervision. FSB highlights the need for:

  • a more robust process to succession planning and appointment of key control functions;
  • an assessment of risk culture at firms;
  • an analysis of business models; and
  • more resources dedicated to managing operational risk.

(Source: Update of G-SIBs, Resolution of SIFIs and Increasing the Intensity and Effectiveness of SIFI Supervision)