Financial stability and macroprudential policy

Identification and setting of capital buffers for systemically important institutions

The Global Financial Crisis highlighted the systemic footprint that some banks have –owing to their size and business characteristics– on the financial stability of their home jurisdictions and, on account of their cross-jurisdictional activity and interconnectedness, on the stability of the global financial system. With the aim of addressing the inherent risks of this type of institutions and the related “too big to fail” phenomenon, it was agreed at the international level (G20) and in the EU that those banks identified as systemically important shall be subject to stricter regulatory requirements than those generally applicable. One of these requirements is the capital buffer or surcharge.