EU G-Sibs outpace non-systemic peers on Level 3 asset growth

Increase in mark-to-model holdings threatens to inflate too-big-to-fail lenders’ systemic profile

As market liquidity tightened in 2022, the European Union’s too-big-to-fail banks saw hard-to-value assets rise faster than non-systemic lenders in the region, threatening to inflate their risk scores in the next assessment of global systemically important banks (G-Sibs).

As of end-September, the bloc’s eight G-Sibs collectively held €124.4 billion ($134.2 billion) of Level 3 assets, those valued using firms’ own models, with no input from market prices – marking a 25% increase year on year