Following a review, at the end of May the Basel Committee on Banking Supervision announced that it would treat EU-based global systemically important banks’ (G-SIBs’) cross-border exposures within the European Banking Union (EBU) as largely domestic, rather than foreign, exposures.
Under the reforms, 66% of EU-based G-SIBs’ cross-border exposures within the EBU will be treated as domestic exposures. This will result these lenders having a lower systematicity sub-score for cross-border exposures than under the current methodology, which could lead to the banks requiring lower capital buffers.
