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G-SIBs – Higher Loss Absorbency (HLA) requirement
A revised assessment methodology
Basel Committee's published in July 2018 a revision of the methodology for assessing and identifying global systemically important banks (G-SIBs) and for imposing a higher loss absorbency requirement (previous document released in 2013).
The assessment methodology for G-SIBs is an indicator-based approach comprising five broad categories: size, interconnectedness, lack of readily available substitutes or financial institution infrastructure, global (cross-jurisdictional) activity and complexity. Banks are designated as G-SIBs based on these indicators and supervisory judgement. Each indicator is further divided in subcomponents.