EBA final draft regulatory technical standards on the methodology for the identification of global systemically important institutions (G-SIIs) under Article 131 of Directive 2013/36/EU

Pursuant to Article 131(1) of Directive 2013/36/EU (‘the Directive’), competent or designated authorities in the Member States will identify European banks representing a higher risk to the global financial system as Global systemically important institutions (G-SIIs). For G-SIIs, higher own funds requirements will apply depending on their systemic relevance, according to which they will be allocated to sub-categories (‘buckets’). Whilst the Directive outlines certain basic principles of the methodology for identifying G-SIIs and allocating them to subcategories, Article 131(18) sets out a mandate for the present draft RTS to specify this methodology further.The Directive and these draft RTS require Member States’ authorities to take into account internationally agreed standards for the identification of systemically important institutions. In particular, this means the framework for global systemically important financial institutions established by the Financial Stability Board and developed by the Basel Committee on Banking Supervision (BCBS). The Directive and the further specification of the methodology are designed so that data reported by EU and non-EU banks for the BCBS identification process can also be used for identification pursuant to the Directive. Member States’ authorities should ensure that the data are identical to those used by the BCBS.Every year, Member States’ authorities will calculate a score for each bank to measure its systemic significance. The Directive defines five categories of indicators to be used in this scoring process and these draft RTS specify 12 (sub)-indicators that fall into these categories. In addition, authorities are required to apply the same parameters for calculation and allocation to subcategories: for each year, ‘denominators’ calculated on the basis of indicator data taken from a sample of large EU and non-EU banks to normalise the indicator values and make the scores comparable, and cut-off scores between the subcategories.The indicators are designed to reflect