World’s Biggest Bank Faces Higher Global Capital Requirement
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Industrial and Commercial Bank of China Ltd. (ICBC), the world’s largest bank by assets, has been moved into a higher tier of global systemic importance, a shift that increases the amount of extra capital it must hold under international rules.
The Financial Stability Board recently placed ICBC in the third bucket of its latest list of global systemically important banks (G-SIBs), raising its capital surcharge to 2% from 1.5%, meaning it must keep a thicker buffer on top of standard capital requirements. The four other Chinese state-owned banks on the list kept their previous positions.
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- ICBC has been moved to a higher tier of global systemic importance, raising its capital surcharge to 2% from 1.5%.
- The upgrade reflects ICBC’s increased scale and interconnectedness; other major Chinese banks retained their positions.
- Analysts note China Merchants Bank is close to G-SIB status, while some banks manage growth to avoid extra requirements.
- Industrial and Commercial Bank of China Ltd.
- The Industrial and Commercial Bank of China Ltd. (ICBC) is the world's largest bank by assets. It has been moved to a higher tier of global systemic importance, requiring it to hold more capital. This upgrade reflects its growing scale and global interconnectedness. Analysts believe ICBC is well-prepared to meet this increased capital requirement.
- China Merchants Bank
- China Merchants Bank is nearing qualification for Global Systemically Important Bank (G-SIB) status. Its score has risen to 122, just eight points shy of the entry threshold. If designated, it would face higher capital and compliance costs.
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