This chapter describes principles to identify domestic systemically important banks.

Version effective as of 15 Dec 2019

First version in the format of the consolidated framework.

Introduction

50.1 The Committee has developed a set of principles that constitutes the domestic systemically important bank (D-SIB) framework. The 12 principles can be broadly categorised into two groups: the first group (SCO50.5) focuses mainly on the assessment methodology for D-SIBs while the second group (RBC40.7) focuses on higher loss absorbency (HLA) for D-SIBs. [HLA refers to higher loss absorbency relative to the Basel III requirements for internationally active banks. For domestic banks that are not internationally active, HLA is relative to requirements for domestic banks.]

50.2 The principles were developed to be applied to consolidated groups and subsidiaries. However, national authorities may apply them to branches in their jurisdictions in accordance with their legal and regulatory frameworks. [While the application to branches of the principles regarding the assessment of systemic importance should not pose any specific problem, the range of policy responses that host authorities have available to deal with systemic branches in their jurisdiction may be more limited.]