US G-SIBs May Need To Hold Significantly Higher Surcharge

The Federal Reserve Board (FRB)’s latest proposal imposing additional capital requirements on the US’s globally systemically important banks (G-SIBs) would result in the banks holding significantly higher surcharge compared with their global peers.

In its December 2014 Regulatory brief titled: “G-SIB capital: A look to 2015”, the PwC report points out that the FRB’s latest G-SIB buffer proposal indicates the latest example of heightened regulatory expectations on US-SIBs, related to capital, liquidity, or risk management requirements.

Three times more CET1 requirements

According to the PwC report, the FRB’s December proposal implements the Basel Committee on Banking Supervision’s (BCBS) G-SIB capital surcharge framework that was finalized in 2011.The PwC report notes the FRB’s latest proposal might be finalized in 2015, mandating US...