The Financial Stability Board (FSB), which coordinates global financial regulation, announced yesterday that it has removed BBVA from its list of global systemically important banks. Spain’s second biggest bank has been included in this list of 30 banks since 2012.
The banks on the FSB’s list have to face additional capital charges because of the risk to the global financial system inherent in their size. The fact that BBVA is now off this list implies it is no longer subject to the capital buffer requirements for these banks. Nor does it have to comply with the proposed regulation regarding Total Loss-absorbing Capacity (TLAC), which could raise the total minimum capital ratio to 16% of a bank’s consolidated risk-weighted assets.
BBVA’s removal from the FSB list will be beneficial for the lender, according to analysts at ACF, as “it won’t need the additional capital cushion the global systemically important banks are required to have.”