The Financial Stability Board has raised capital requirements for three banks considered systemically important — BNP Paribas, Goldman Sachs and JPMorgan Chase — as part of a yearly review of the safeguards it sets to try to prevent another global financial crisis.
The board, a body steered by central bankers and other government officials from around the world, published its latest list of “globally systemic banks,” known as G-SIBs, on Tuesday, keeping the total count steady at 30 institutions but changing its categorization of BNP, Goldman and JPMorgan. All three were already on the list, but now they each will have to meet a standard for absorbing losses on their balance sheets that is 0.5 percent higher than last year’s.
JPMorgan and Goldman both already meet the board’s requirement. The so-called G-SIB surcharge that the Federal Reserve imposes on each bank under its own capital requirements exceeds the stability board’s updated number. The Fed does not apply its own G-SIB surcharge to foreign banks, so it does not hold Paris-based BNP to the same standard.
A spokeswoman for JPMorgan noted that the bank exceeds the stability board’s requirement. Spokesmen for Goldman Sachs and BNP declined to comment.
The stability board said in a statement posted on its website that the change reflected a shift in each of the banks’ activities, but it did not elaborate. The pandemic caused cash to flood onto the balance sheets of banks all over the world as governments engaged in stimulus efforts to keep their economies from tanking during lockdowns and other safety measures that dampened normal economic activity.