2.4.3 Combined buffer requirement

The G-SII buffer has to be maintained by global systemically important institutions (G-SIIs). Article 131 CRD IV provides for the identification of G-SIIs by the competent authorities. EU parent institutions, EU parent (mixed) financial holding companies or institutions, including banks, can qualify as G-SII. A G-SII cannot be a bank that is a subsidiary of an EU parent institution or EU parent (mixed) financial holding company. The identification of G-SIIs always takes place on a consolidated level. The methodology of identification and allocation of G-SIIs is based on five categories measuring the systemic significance of a bank for the global financial market, and is further specified by the Commission in Delegated Regulation (EU) No 1222/2014. The EBA maintains a list of G-SIIs and other large institutions with an overall exposure measure of more than EUR 200 billion and which are poten tially systemically relevant on its website: www.eba.europa.eu. The indicators that are used to measure the systemic significance are total exposure, interconnectedness, substitutability of the services or of the financial infrastructure provided by the group, complexity of the group and cross-border activity of the group (See Article 131(2) CRD IV and the Annex to Delegated Regulation (EU) No 1222/2014).

The O-SII buffer has to be maintained by other systemically important institutions (O-SIIs). O-SIIs are institutions that, due to their systemic importance, are more like ly to create risks to financial stability. O-SIIs can either be EU parent institutions, EU parent (mixed) financial holding companies, or institutions, including banks (Article 131(1) CRD IV). The identification of an O-SII can take place on an individual, sub-consolidated or consolidated basis (Article 131(1) CRD IV). The systemic importance of O-SIIs is assessed on the basis of size, importance for the economy of the EU or of the relevant Member State, significance of cross-border activities, and interconnectedness of the institution or group with the financial system in accordance with Article 131(3) CRD IV and the EBA O-SII Guidelines. The EBA maintains a list of O-SIIs on its website: www.eba.europa.eu.

Article 128 CRD IV. CRD V provides for several amendments with respect to the combined buffer requirement. Melis and Weissenberg 2019, p. 5.

Article 162(5) CRD IV.