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EBA’s guess is 200 O-SIIs

On 18 July 2014, the EBA published a Consultation Paper on the Guidelines to assess other systemically important institutions (O-SIIs).  O-SIIs represent the EU implementation of the BCBS’ domestic systemically important banks (D-SIBs).

Contrary to G-SIBs, the D-SIBs classification allows for considerable discretion by national authorities. Accordingly, a basket of optional indicators is available in order to match the specificities of national banking systems, on top of mandatory indicators.

Institutions identified as D-SIBs by national authorities might be subject to additional burden, such as closer supervision and additional capital buffer of up to 2% on a consolidated,sub-consolidated or individual basis.

In the UK, the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014  designate the PRA as the authority responsible for identifying O-SIIs.  Articles 34 states that no O-SII may be required to maintain an additional O-SII buffer. The PRA is expected to take into consideration the guidelines to develop their own policy in the first half of 2015, which is likely to include stricter supervision.

The EBA estimates that 200 institutions will be labelled as O-SIIs across all Member States.

The BCBS is expected to start an international peer review of the implementation of the D-SIB framework by 2015.

Comments should be submitted by 18 October 2014.

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