By CentralBankNews.info
The Agricultural Bank of China Ltd. (AGBank), China’s third largest bank by assets, has been added to the list of globally systemically important banks (G-SIBs) maintained by the Financial Stability Board (FSB), the Swiss-based body that coordinates global financial regulation.
The addition of AGBank increases the overall number of G-SIBs on FSB’s list to 30.
Systemically important banks are defined as those whose distress or disorderly failure would cause significant disruption to the global financial system and economic activity due to their size, complexity and interconnectedness. These banks are often referred to as “too-big-to-fail.”
Both the FSB and the Basel Committee are based at the Bank for International Settlements (BIS) in Basel, Switzerland.
Banks on FSB’s list of G-SIBs are subject to tougher financial regulation, including higher loss absorbency requirement that is being phased in from Jan. 1, 2016, resolution plans in the event of a collapse, and higher supervisory expectations for risk management functions, risk governance and internal controls.