JP Morgan, BNP Paribas and Goldman Sachs increased their systemic footprint enough in 2020 to incur higher capital surcharges, the Financial Stability Board (FSB) announced today (November 23).

While the regulatory body made no changes to the current list of the 30 global systemically important banks (G-Sib), it moved the three banks to higher surcharge buckets – a sign the dealers now pose a higher systemic risk.

JP Morgan was moved up to systemic risk bucket 4 from bucket 3, attracting a 2.5% capital buffer – 50 basis points higher than in 2020. No other G-Sibs were placed into the same bucket.

BNP Paribas was shifted from systemic risk bucket 2 to bucket 3, with a capital buffer of 2%, also attracting an additional capital buffer of 50bp. The French bank joins Citi and HSBC in this group.

Goldman Sachs moves from systemic risk bucket 1 to 2. Its capital buffer rises to 1.5%, up from 1% last year.

### What is it?

Global systemically important banks are designated using the Basel Committee on Banking Supervision’s assessment methodology, which measures systemic risk. Each bank is given a systemic risk score found by averaging the scores of five separate indicator categories: size; interconnectedness; complexity; cross-jurisdictional activity; and substitutability.