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Citigroup tops list of global banks posing systemic risk 

November 22, 2016

Martin Arnold, Financial Times

Three of the biggest US banks have been judged to pose greater systemic risks than last year and had their capital requirements increased by global regulators in their annual rankings of the most systemically important financial institutions.

Citigroup, Bank of America and Wells Fargo all had their capital buffers increased by several billion dollars, along with Industrial and Commercial Bank of China, in the annual systemic rankings published by the Financial Stability Board.

Meanwhile HSBC, Barclays and Morgan Stanley were all judged to be less systemically risky and had the size of the capital buffer they must hold reduced.

The list of the 30 globally systemically important banks is the main way for financial regulators to indicate which ones are most likely to take down the rest of the world’s financial system if they were to go under and to force them to increase the capital buffers that can be used to absorb losses.

Citi said: “The FSB’s G-SIB measure does not drive a binding capital constraint for Citi.” It added that the US Federal Reserve requires it to hold an even bigger systemic buffer of 3 per cent. Read more

 
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