Four global banks must hold most capital, say regulators

Global regulators have said that Citigroup, Deutsche Bank, HSBC and JP Morgan Chase must hold additional capital in order to be able to absorb possible losses.

The Financial Stability Board published an updated list detailing the capital surcharges required for global systemically important banks (G-SIBs), and all four have were targeted for the highest capital surcharge of 2.5%.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The capital surcharges for systemic banks, set in half-percentage-point increments ranging from 1% to 2.5%, come on top of agreements by the Basel Committee on Banking Supervision to more than triple the core reserves they must hold against possible losses.

The extra requirements are calculated against banks' interconnectedness, size, complexity, global reach, and the ability of other firms to take over their functions if they fail.

The Financial Stability Board has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.