FSB Assigns Lower Capital Requirement to Bank of America

Core Points - Two global systemically important banks (G-SIBs) have changed their capital requirement buckets for 2024, as reported by the Financial Stability Board (FSB) [1][2] - Groupe Crédit Agricole moved from bucket 1 to bucket 2, indicating a higher capital requirement, while Bank of America moved from bucket 3 to bucket 2, indicating a lower capital requirement [2] - The new capital buffer requirements will take effect on January 1, 2026, for the higher requirements, while the lower requirements will be effective immediately [3] Summary by Category Changes in G-SIBs - The total number of G-SIBs remains unchanged at 29, with no additions or removals from the list [4] - The allocation of banks to different buckets reflects changes in their underlying activities, with complexity being the largest contributor to score movements [3][4] Regulatory Requirements - G-SIBs are subject to higher capital buffer requirements, total loss-absorbing capacity standards, resolvability requirements, and elevated supervisory expectations for risk management and governance [4][5] - The Basel Committee on Banking Supervision (BCBS) provides additional details regarding the G-SIB assessment to accompany the FSB's list [5] Shadow Banking Sector - The FSB has indicated a need for more regulation in the shadow banking sector, citing recent market stress and liquidity strains as evidence that non-bank financial institutions can exacerbate systemic risks [6]