RBS no longer one of the world’s most important banks
(16 November 2018 – United Kingdom) Royal Bank of Scotland will no longer have to hold additional capital to offset the systemic danger it used to present to the global financial system after being removed from a list of the world’s most important banks.
Every year the Financial Stability Board and the Basel Committee on Banking Supervision publish a list of global systemically important banks, known as GSIBs, which are forced to hold additional capital in case they collapse.
The decision to remove RBS from the list means the bank escapes the requirement to maintain capital equivalent to an extra 1 percent of its risk-weighted assets.
RBS said in a statement that the “decision […] reflects our progress in building a much simpler, safer UK-focused bank.”
Bank of America also had a boost after being moved down one grade into category two, meaning it will have to hold 0.5 percentage points less additional capital for a total of 1.5 percent.
China Construction Bank went down one level into the bottom category, lowering its extra capital requirement to 1 percent.
JPMorgan Chase is the lone bank in the second-highest GSIB category, which means it has to hold additional capital of 2.5 percent. Citigroup, Deutsche Bank and HSBC all have to hold an extra 2 percent.
None of the 29 GSIB banks are in the top 3.5 percent category.